Line of credit or Signature Loan

If you have any equity in your home, have you considered a home equity line of credit? (Maybe that is what you are referring to.) Most interest paid on a home equity loan is a deductible expense for income tax purposes so you get a slight benefit there over interest on a signature loan.

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I generally think it's a bad idea to convert unsecured debt to secured debt except under rare, extreme circumstances.

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Why?

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extreme circumstances.

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Like 30% interest rates?

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Like 30% interest rates?

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My first question is has there been an attempt to reduce that rate with the creditor. If you are at risk of default, d you think the bank will pick default ($0) or get what they can?

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Why would anyone want to convert unsecured debt?

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1) To reduce the interest rate on the balance owed from 20%+ to less than 10%.

2) The interest is deductible for income tax purposes. He could use the additional tax refund to apply to the home equity loan, if he has the discipline to do so.

3) The additional interest which is not being paid could be applied to principal which would pay off the balance much faster than under the credit card repayment schedule, thereby saving hundreds, or perhaps even thousands of interest expense.

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First, most people don;t have the discipline to not run up the credit cards again

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The original poster would obviously have to guard against doing that. Since he had the good sense to seek the Money Board's advice, I can only assume he does not fall into the category of "most people."

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second which do you think is the better of two bad situations - defaulting on a credit card or defaulting on a HELOC?

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If he is able to pay the CC balance, he will more than able to make the HELOC payments. Thus, there will be less chance of default under the HELOC than under the CC loan.

BTW: CC's have been destroyed. I had two bank cards and two gas cards, wife had 3 bank cards and a old navy.

Well, that shitty sales pitch had banker written all over it.

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Well, that shitty sales pitch had banker written all over it.

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And your "sales pitch" had ignorance written all over it.....

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I said we have lived in the home for a little over a year so how much equity could we have?

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That depends mostly on how much of a down payment did you make when you got the loan. If you had a minimum down payment (meaning how much equity you put into the house yourself vs. how much you borrowed) you probably don't have enough equity to cover the CC balances you mentioned.
However, if you had sold a prior house prior to buying this house and you put the equity you got out of that sale into this house, you might have a chance of having enough equity to cover the big card balances.
You probably can't count on price appreciation over the past year to give you substantial equity after only one year. Not in the housing market we've seen lately. Of course, your specific area might be an exception.

Good luck!