Legal Question in Credit and Debt Law in California

The credit cards and the home mortgage are two separate transactions. As long as you continue to pay your mortgage and are current with the payments, the bank cannot foreclose on your home, even if you default on credit card debt.

You do not want to convert the unsecured debts to secured debts by paying them off with a Home Equity Line of Credit. It is also unwise to refinance your home and pull money out to pay off unsecured debts. That essentially makes the debt secured by the home.

If a bank representative told you that defaulting on the credit cards would result in losing your home, that would be a violation of the Rosenthal Fair Debt Collection Practices Act.

While I am talking about defaulting on credit card debts, I will also mention that it is usually advisable to contact the credit card company and try to work out a payment plan. If that is not feasible, it is generally not wise to hire a "debt settlement" company. Most of them are scams and even if one is run legitimately, they are high priced services for which little value is received.