Christopher Todd Morrison, P.C.
Affordable Bankruptcy
713-396-3704

Options for consolidating credit card debt

Texas residents who are struggling with credit card debt but still have good credit might consider a no-interest balance transfer credit card to consolidate their debt. Another consideration might be getting a personal loan if the interest rates are lower. They could also apply for a home equity loan or line of credit.

Interest rates for a home equity loan may be both low and tax deductible. However, it can put the borrower's house at risk of foreclosure. Repayment terms can be a decade or more, and if the value of the home drops, the owner might end up owing more than it is worth. Furthermore, it may be easier to get rid of credit card debt with bankruptcy.

A person might chose between a home equity loan and a HELOC. While closing costs might be high for the former, advantages include a low fixed rate with an end date. A HELOC may not have a closing costs. Its rates are usually low though they are not fixed, and this can make budgeting difficult.

People should also take into account whether they can pay off their debts in five years or less and if the debt is under half of their income. If either of these is not the case, bankruptcy might be a better option.

Filing for bankruptcy puts an immediate stop to creditor harassment. A person may want to discuss with an attorney whether Chapter 7 or Chapter 13 bankruptcy is the right choice. With Chapter 7, a person may exempt some assets but others might be subject to creditor claims. With Chapter 13, a person might be able to keep more assets by creating a payment plan to pay them off over three or five years.

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