Don't take equity out of your home to pay unsecured debt

Check with your financial advisor, but it may not be wise to use the equity in your home to pay off your unsecured debt.

Steven: Now, I'm in a position I actually have a little bit of equity in my home. However, my credit is terrible. I've been late on my payments, I've been struggling. I want to refinance. I know I could take some of that equity and make good on some of the bad loans that I've had in the past such as car or late bills, or something like that. But nobody wants to touch me because of my credit rating, because of my late payments. Any suggestion?

Attorney Tom Olsen: First of all Steven, let me suggest this to you, that you should not take the equity in your home and use it to pay off unsecured debt. Steven, your home is your castle. It is your investment in your future, and I don't think you should be using it to pay off credit card debt or other debt. Steven, what I might suggest you is a possibility of bankruptcy to get rid of all that unpaid debt, and eventually improve your credit score.

Steven, the good news is Jim Monroe is a bankruptcy attorney. He is at my office right now. You can hang up with me Steven, and call my office right now at 407-423-5561. Again, 407-423-5561. That's Attorney Tom Olsen in Orlando, Florida. Hey folks, we're going to take a break. We'll be back in just a few minutes.