What happens when you consolidate your credit? What are my options?

Asked over 1 year ago - Walker, MO

My husband and I have credit card debt, we've been working on paying it off but its not moving at all. We refinanced our home last year for lower rate, we're thinking maybe refinancing again with cash out which means we would need an appraisal and hope we have enough equity. Also thought of consolidation loan. If we consolidate, does that hurt our credit? We just want to find a way to pay it off and keep it off, our credit is not good enough to get a personal loan to pay off. Any advice will be greatly appreciated.

Attorney answers (2)

  1. Steven Parnell Weaver

    Contributor Level 13

    Answered . It all depends on what you value. If your credit is already bad, you may consider seeing if you can settle with the companies or hiring an attorney to settle for pennies on the dollar. The process usually takes you failing to pay for 90 days at which point the collectors call and call and call and threaten to sue, but if you owe $2000 and you tell them that you have $800 to pay over a 3 month period, they might bite on that offer because usually the collector has already bought the account from the original lender. Sometimes. Or you can get an attorney from the jump and have them negotiate the amounts. You might pay him $500 to save you $2000. Consolidation loans usually also have ridiculously high interest rates and you end up back where you started.

  2. Matthew Scott Berkus

    Contributor Level 20


    Lawyer agrees

    Answered . See my article below regarding the 3 unbreakable rules for getting out debt. The one that directly addresses your issue.

    Rule 2: Never turn unsecured debt (e.g. credit cards) into secured debt (consolidation loan or cash out mortgage).

Related Topics


There are different types of debt, but all involve one person (the debtor) owing money to another (the creditor). Terms of repayment are governed by a contract.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.


Ask now

32,284 answers this week

3,480 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

32,284 answers this week

3,480 attorneys answering