What will happen to my credit cards if my home is foreclosed?
Question by triguyinla: What will happen to my credit cards if my home is foreclosed?
I have over $ 100,000 in credit on my 7 or 8 credit cards, all with a 0 balance. I am facing foreclosure in a few months. Will the banks cancel my credit cards once I get a foreclosure on my credit? Should I just max out all my credit cards with no intention to pay them?
Best answer:
Answer by Teresa H
Unless you are earning a very large income, you don’t need to have $ 100,000 in available credit. You should close all but 2 or 3 of the credit card accounts. Pick the ones with the most favorable terms, such as the longest grace period, the lowest interest rate, no annual fee, and with the maximum limit at about 15% of your income. I am assuming that since you have a 0 balance, you pay them off each month, which is a very sensible practice that you should continue. Showing poor judgement along with poor luck doesn’t help you in the long run. These actions will result in a credit score that won’t go as low as it could otherwise.
What do you think? Answer below!
From what I see I believe you will have your rates increased…
file for bank ruptsey, before the bank takes your home. That way you can include your credit debt also. With all that combined, you still face the same damage with a foreclosure on your house, on your credit report.
It’s possible the credit card companies when doing an inquiry on your credit cards will close your accounts, but…charging recent debts, foreclosing on a home, and if you’re even thinking of filing for bankruptcy because you’ll have a deficiency balance on your foreclosed home..think again…The new bk laws will not allow new charges and abusive spending to be discharged in a bankruptcy. It’s not like the old days when they bought home, maxed credit cards and then filed bankruptcy and kept everything. You need to think real clear and hard on this one. If you max the credit cards, out…..you could be made to pay them all off and not be able to do anything with them in the future.
Good Luck!