Can a HELOC help pay off existing debt quicker? Good question. It will actually pay off your credit cards very quickly. As long as you are credit worthy, it only takes 1-2 weeks to get a home equity line of credit. That is–if you can find a bank to give you a loan right now.

The question you should be asking is–Should I get a HELOC credit to pay off debt? For 95% of the people asking this question, the answer is NO. The truth about this question is it will not actually pay off your debt. It is just moving it from one place to another. Yes, you will get a lower interest rate with a HELOC, but what happens if you cannot make the payments on your HELOC? The possibility exists that you will lose your home due to foreclosure.

Bottom line–not paying credit debt can ruin your credit, but you will still have a roof over your head. The unfortunate fact is that within a year of paying off credit card debt with a HELOC, most of the people that take out these loans have more credit card debt.

I think credit counseling is a better option. It effectively gets your debt paid off, the credit counseling company provides debt management education AND you are not able to charge on any of the accounts in the program. You also sign an agreement stating that you will not open any new credit card accounts while you are in the program.

The nice thing about credit counseling is it will not have a major impact on your credit. Your score may go down at first. But by the time you get to the end of the program and have the debt paid down, your credit score will probably be higher than it was before you entered consumer credit counseling.

Make sure that you do not enter into an agreement that you are not sure you can honor. The consequences for default could be severe. Also,if you think you might be in financial trouble, you probably are. If this is the case, the sooner you research your debt relief options and make a choice, the better off you will be.