Refinancing Home Equity Line of Credit

[goingout]

I was thinking that since interest rates are lower now it might be good to see if I could renegotiate with Suntrust and get my variable rate converted to a fixed. However, at about this time I am realizeing that things are coming to a head and we will need to file. DH's commission is not what we had hoped it would be. So, I have a payment to a card due and the mortgage for July and the HELOC payment. I cannot pay them all and pay for gorceries and daycare besides. If I start missing payments on my cards now, will I be out of luck to refinace with Suntrust? Will they not care if we go into it with the intention of reclaiming that debt, since we want to keep paying on the mortgage and HELOC and keep the house?

What to do?

[Help!]

I was thinking that since interest rates are lower now it might be good to see if I could renegotiate with Suntrust and get my variable rate converted to a fixed. However, at about this time I am realizeing that things are coming to a head and we will need to file. DH's commission is not what we had hoped it would be. So, I have a payment to a card due and the mortgage for July and the HELOC payment. I cannot pay them all and pay for gorceries and daycare besides. If I start missing payments on my cards now, will I be out of luck to refinace with Suntrust? Will they not care if we go into it with the intention of reclaiming that debt, since we want to keep paying on the mortgage and HELOC and keep the house?

What to do?

I think not being able to get refinanced is the least of your worries. The fixed rate isn't going to make the real problem go away. As I see it, the existence of a HELOC says to me that your income was insufficient to comfortably afford living expenses and the house you're in, even before you went into CC debt. I'm guessing you started using credit cards to make ends meet, took out the HELOC to pay them off (maybe in addition to some home improvements), then ended up with HELOC plus more CC debt? If so, it's an epidemic and you're in good company. Unless you expect your income to increase (and I mean predictable income, not based on commissions/bonuses), my advice would be to let go of the house.

[goingout]

Yeah, everyone advises that, but the thing is after reviewing things for a long time our conclusion is that paying off the HELOC and the mortgage will be difficult but no more difficult than letting it go saving up for a new 10 - 20% downpayment and getting back into the housing market. Any house we would then be able to afford would need improvements in addition. Getting a low rate locked in will help make it a little less difficult going into the future. Also, this house, although the interior needs work, the exterior and systems are all new or in good repair. So, we could live in it for a good while and not have to do much at all.

I guess what I'm asking is, when you reaffirm a debt, because you want to keep paying on it and keep the asset, are the terms normally the same as before the bankruptcy or do you have to renegotiate terms?

[keepmine]

If you wish to refi, do it before your credit score tanks in order to get a good rate. However, credit score is only part of the process. The lender will also take into account your income and debt to income ratio in making the lending decision.

Unless you can negoiatate a change, reaffirmations carry the same terms. One big question is, do you have any equity in the home? If not or, the equity is minimal-let it go.