Loose your home 'cause of a CA? Never!
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Posted by Bob3
(205.174.22.26) on June 29, 2004 at 17:00:47:
Credit card debts can lead to loss of home
Counselor says many N. Texans succumb to bill collectors, stop making mortgage payments By STEVE STOLER / WFAA-TV Many North Texans are losing their homes to foreclosure trying to pay off credit card debt. It may sound like misguided priorities, but what looks like an easy solution can become a much bigger problem. Credit counselor Dawnell Foster said one of the first steps is to cut up your credit cards. "Some people actually enjoy it," Foster said. "They are asking for the scissors; they are ready to cut them up." Foster is a counselor with the Consumer Credit Counseling Service of North Texas in McKinney. When it comes to credit card debt, she's seen just about everything. "The most was about $145,000 in credit card debt," she said. Foster said most debtors she sees are younger, first-time homebuyers who had some hardship - a debilitating accident, a medical condition or loss of a job. Others are spendaholics who use plastic to buy, buy, buy. "You don't see people waiting and saving and then buying. You see people buying, and that's what gets a lot of people in trouble." Miss a payment and pay the price and the penalties - and then the overwhelming interest. "You may start out with 0% for 12 months, but if you miss one payment, on the majority of credit cards out there your interest rate will go up as much as 27 to 29 percent," Foster said. The credit counselor said it's hard to believe, but all too often the folks with credit card problems succumb to the pressure put on them by bill collectors. When that happens, they stop making mortgage payments. "Therefore, they put the mortgage company on the back burner and then, they end up losing their home," she said. Foster said there is a way out. Most creditors work with the counseling service to make concessions, lowering interest rates, payments and fees. She said there's a simple lesson from all this debt: credit cards should never be used as a tool of survival, and never be used to pay living expenses. When people are desperate, Foster said, they do desperate things, making matters even worse.
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