It is always better to have a plan of action financially before you get stuck in a corner.  Lenders like to extend credit when you don’t really need it.  They are hoping in a way that you will use it and pay minimum payments until the very last payment.  This ensures the profit can be maximized.  They are in the business of making money.  They make money when you first use the cards and make more money when you pay interest and fees.

If you are lucky enough to own a home that has equity in it you may be able to get a 2^nd home mortgage with less qualification that you may with a regular home loan.  It is possible that you have a really great fixed rate loan on the bulk of the house, but only need a little extra loan that you can pay off in a faster time frame.  You also want to get a break on your taxes whenever you can.  You probably will get a better rate on the 2^nd mortgage than you have with your credit card.  Interest rates can go all the way up to 30%.  If you get a 2^nd mortgage you can sometimes get the current interest rate or close to it.  This will make if easier for you to pay the amount down quicker without paying a fortune in interest to the credit card company.

Because it is a home loan they may only require the interest payment as the minimum payment.  This could help if you are really tight on cash at the time, but be aware that 2^nd mortgages may be only for a 5 year or 10 year period.  You need to plan ahead on this one too, whether you can make the extra money soon as the can foreclose on your house when loan term expires.  You should consider retiring your credit cards at this time so that you don’t end up in worse shape than you already are in.  You should also work on a budget and get ready to pay for everything with cash.

Come tax time the interest that you paid on a 2^nd mortgage is tax deductible.  This usually is well worth it as it gives you a break on taxes.  The interests that you pay on credit cards that are used for personal use are not tax deductible.  Consult your tax of financial advisor if this strategy will help you as each person’s taxes vary.

Bankruptcy laws have changed so that your wages can be garnished for repayment of debt.  The reality is that you don’t want to go bankrupt any time soon.  It wrecks your credit for 10 years and you really can be broke when you are starting over again.  By addressing your financial problems sooner than later you could really turn it around.  Bankruptcy maybe wouldn’t be the easy way out that it might have been in the past.

Even if you don’t have debt today, a 2^nd mortgage can be a better line of credit to have on hand just in case of extreme emergencies.  If you lost your job for instance, you went through your savings and you still didn’t have work, if you had a 2^nd mortgage before all of this happened without any balances on it, you could tap into that financial reserve while your situation improves.  If you try to get a 2^nd after you are out of a job, you might find that they will turn you down.