The front page of the June 7, 2011, issue of the Wall Street Journal reports that almost forty percent of homeowners who took out second mortgages on their homes “are underwater on their loans, more than twice the rate of owners who didn’t take out such loans.” (click here to view the article).
Dealing with constant calls from credit card companies can be extremely difficult. They call all hours of the day. Some even try to call you at work. To get rid of this stress, many Americans have taken out second mortgages on their homes.
The problem with borrowing against equity on your home pay off credit card debt is that you transform unsecured debt (which can be eliminated in bankruptcy) into secured debt (which cannot be eliminated in bankruptcy unless your surrender the collateral……i.e. your house).
What happens when you fall behind on the equity line payment? The creditor calls you and threatens to take your house away from unless you pay it immediately. These guys can be worse than credit card companies.
Don’t ever take out a second mortgage on your house to pay off credit card debt without first meeting with a local bankruptcy attorney. Your bankruptcy attorney will explore all the options and review your income and monthly budget with you.
If you have already fallen into second mortgage misery, the good news in Northwest Georgia is that you may be able to eliminate the second mortgage in a Chapter 13 bankruptcy. As long your house is worth less than what you owe on the first mortgage, you can wipe out the second mortgage. However, you must complete your case. In other words, if you don’t cross the finish line (your case gets dismissed) your second mortgage ghost can resume haunting you.
For more details on how to eliminate a second mortgage, please click on the link listed below.