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How To Get Money When You Need Money

By Mory Brenner, Esq.

Find out how to get the money you need to stop a foreclosure, avoid bankruptcy or help in an emergency. You do not need good credit, you need to know how and where to get the money to help. Learn about many ways to get money when you have no money and pursue one or more ideas that fit your personal situation.

1) Do You Really NEED Money?

  • The old adage claims that banks gladly lend you money when you don’t need it. To a certain extent that holds true. Where people need to save a home from foreclosure or avoid a bankruptcy filing they likely experienced enough money trouble already that a standard bank loan no longer remains an option. Many choices do exist for you to get the money you need for emergency situations if you plan ahead or know the right places to ask and perhaps swallow your pride. I present this list based on my years of experience as a lawyer helping to save people from foreclosure. No particular way to get money will suit everyone. Read all the information to help you here and decide what will work best for you on your own or with the aid of your own attorney.
  • Before we examine the ways to get the money you need, let’s define “need” as I will use it one this site. You need money to save your home from foreclosure, but even then only if you can keep the house in the long run. Do not use emergency money just for a short-term fix. For example if you get money to stay in your home for two or three more months only to face eviction at a later date, use your emergency money to find a new place to live and move rather than waste it on a short term answer and need more money again for relocation. Think carefully about what you really need and plan into the future. Many of the ways to get money examined here qualify as “one shot deals”, if you waste the opportunity you may not get another. Do not turn a molehill into a mountain. Some people who never missed a payment in their lives consider it a crisis to be a few days late. Step back and look at the larger picture. You need money for shelter, life does not end if you make a late payment. You will not freeze to death if you give no money to your credit card company for months and they charge off your card. Dawn will come again even if you have bad credit. Some of the methods here do not warrant such warnings and some reasons for needing money may justify the requests, just be smart, think ahead and do not dig a deeper hole for yourself. To learn even more about allocating money in desperate times read my page: Who to Pay When You Can’t Pay Everyone.

2) Reduce the amount of money you need.

  • Still think you need money; let’s assume you do need money, before spending that money try to reduce the amount of need. Examine these two examples and either use them directly or apply the concepts to your own financial demands. Imagine you face mortgage foreclosure unless you pay $9000 in back payments. You established you need to deal with the mortgage arrearage and you need to keep the house. $9000 represents a figure that either you do not have or would cause you great hardship to spend. Rather than attempting to get that money, you can reach a deal with the bank to take a small portion of that money now and pay the rest over time. Sometimes you can do this on your own and in other cases you will need the help of a professional foreclosure negotiation service. A settlement might demand $3000 now with the rest due added to the mortgage balance and paid over years. You can read more about this on our page about ways to stop a foreclosure. Focus now on the idea that the money needed to save the house dropped from $9000 to $3000. Of course getting a third less money presents an easier task, but more importantly the reduction might represent the difference between being able to raise the needed money and losing the house. Similarly picture you owe $30,000 in credit card debt and properly decided you need to deal with the debt now and ruled out bankruptcy as an option. Hire a credit card debt settlement service to cut the money owed to $15,000 and pay the settlement out over two years. You just reduced the need from $30,000 to $750, required for the first payment. While we have this topic in front of us, don’t forget about examining the ultimate method of reducing the need for money: a bankruptcy filing discharging your debts. Do not confuse this statement as an endorsement of everyone filing bankruptcy to deal with their money problems, but for some people it indeed represents the best choice and the only way to know requires learning about what a bankruptcy does, what bankruptcy alternatives exist and making an intelligent choice based on your own situation. Contact a local bankruptcy lawyer or read more about chapter 7 bankruptcy or chapter 13 bankruptcy or do all of these to learn more and establish the best way to deal with your own debt. Similarly you might face a situation where you do need money to save your home, but that does not mean keeping the house merits spending that money. In instances where you will only delay an inevitable loss, cases where you hate the property or times when economic parameters in your life have changed and your existing home no longer makes sense, you should not confuse needing money to save your home with actually needing to save your home. Sometimes the best path involves letting the house go either through a true third party sale, a deed in lieu of foreclosure, a short sale or a foreclosure auction.

3) Ways To Get The Money You Need.

  • Home Equity Line Of Credit
  • Establishing a Home Equity Line of Credit (HELOC) ranks as one of my favorite ways to get money when you need it, just remember you cannot wait until you have money problems to set it up. Let’s start by learning what a home equity line of credit is. You apply with a lender for a specific maximum credit line. The amount of money you might get in your line depends on the equity in your house. Let’s imagine a $300,000 home with a $200,000 first mortgage. At an 80% Loan To Value (LTV) a bank could grant you a $40,000 HELOC. What do you do with the money from a HELOC? Nothing, if you ask me. Set up your HELOC when things are good and you do not need money, and just know its there. If life never throws you a financial curve ball be glad. Should disaster strike, like a medical emergency, loss of job or any temporary set back, you have a $40,000 loan already set up, just write a check. Interest rates rarely strike fear in borrowers and money available through a HELOC usually exceeds money available to people from any other source. Should we call HELOCs a miracle for everyone? No, if you abuse your HELOC you may as well play with a loaded gun. Never forget that HELOCs base their existence in the fact that your home secures the HELOC, if you default they can foreclose just like any second mortgage. The worst and most common mistake happens to people who run up credit card debt by spending far more money than they can afford. When things become disastrous they get a HELOC and pay off the credit card, but do not change their spending habits. In time they run up the money owed on their credit cards all over again, but this time the people default not only on the credit cards but also the HELOC and they lose their home. It all comes right back to understanding when you need money and when you don’t. The same applies to when you should access your HELOC and when you should search out another way to deal with a shortage of money. Finding a Home Equity Line of Credit takes just a bit more trouble than a standard second mortgage, but offers much more flexibility.
  • Secured Debt Consolidation Loan
  • At one time you could not watch television without a constant flow of debt consolidation offers inviting you to solve all your money problems. Most often these products represent nothing more than a fancy way to market a standard second mortgage. Understanding that, these only help homeowners and come with the same dangers as a HELOC in that you literally “bet the house” that you will pay back the money you borrow. Do not use a secured debt consolidation loan or a HELOC unless you have the problem that caused the money problem under control. Situations best suited to utilize a secured debt consolidation loan would contain some or all of these elements: a low first mortgage rate (otherwise look at a cash out refinance), good equity in home, money problems caused by a one time event which has been cured, solid income to repay loan, desire to deal with the money issue as a single event without temptation of reusing or abusing the available equity (otherwise try a HELOC) and/or debt associated with the house, like money owed for renovations. Explore secured debt consolidation loan offers online or at your local bank.
  • Cash Out Refinance or Foreclosure Bailout Refinance.
  • Cash out refinance operates just as you might expect, a homeowner refinances their house for more than the previous mortgage and uses the extra money to pay off debt. Once you have addressed the same concerns about pledging your house as collateral that we discussed in the home equity line of credit and secured debt consolidation loan section you might specifically think of a refinance when you need money under these circumstances: refinancing could reduce your existing first mortgage interest rate and save you money, you need a long term to repay the loan, you need the lowest payment possible, a foreclosure bailout loan where a refinance will not only stop a pending foreclosure but permit you to keep the home for the long run (most lenders will not grant HELOCs or second mortgages for foreclosures you will need to refinance all mortgages).
  • Reverse Mortgage
  • For seniors, over the age of 62, with few assets other than equity in their home, a reverse mortgage loan can be a valuable option for staying in their home and turning the equity in their home into the money they need. More importantly for home senior home owners still paying a mortgage each month, taking a reverse mortgage means the end of mortgage payments, which in most cases provides a high degree of expense relief. A reverse mortgage represents a loan that under most circumstances need never be repaid as long as the senior homeowner remains living in the home, the lender gets paid back by selling the house after your death. In addition to a lump sum of cash, reverse mortgage loans can provide you with money you need each month, as if the lender pays you a mortgage payment each month instead of you paying the bank. Seniors can use proceeds from a reverse mortgage to pay for living expenses, home maintenance, insurance, taxes, and other important expenditures. If you are an older senior with substantial equity in your home and few other assets or serious health issues, and are looking for a good way to finance staying in your home or access money you need, you may want to apply for a reverse mortgage. Securing a reverse mortgage on a valuable home can provide a significant amount of cash for living necessities, taxes, insurance, and home maintenance. The main criteria to get money from a reverse mortgage revolves around your age, home equity, and interest rates, so you need not worry about credit score or the ability to pay the loan back.
  • Credit Cards
  • I list credit cards for people in foreclosure or perhaps facing a medical emergency. If you find yourself in need of money due to overwhelming credit card bills, never take a cash advance on another credit card just to make minimum payments on the first credit card. I saw this tragic mistake frequently with money owed snowballing over $100,000. Bad spending habits and using other credit cards to compound debt end up a combination that rates as a leading cause of bankruptcy. Just because a bank offers you a credit card does not mean you should accept it or charge cash advances. On the other hand, if you need money to stop a foreclosure or a family emergency and you have money available from a credit card cash advance and you understand carrying credit card debt comes with a high interest rate and you know with great confidence that you can afford to make payments and repay the money quickly and you said yes to all of these questions and you exhausted any better options, than it may make sense to get the money you need from a credit card cash advance. If you credit has not yet been marred you might even try to obtain a new credit card for this purpose, but never use this method to take on more debt than you can handle. Many people mistakenly think the credit card companies know best and they would not give you a card unless you could truly qualify for it. Never fall for that myth, you must protect yourself from yourself sometimes, especially when the root of your money problem traces back to your budgeting and spending habits.
  • Retirement Plan
  • While IRAs and 401k plans should stay untouched until retirement, circumstances may demand you access emergency money from them. First know the rules. Taking money early from an IRA can cost a 10% penalty plus the tax you owe for all the money you made while the IRA lay in deferred tax status. Withdraw money from an IRA only as a last resort, but I note it here because this page lists places to get money when you find yourself in a last resort situation. Consider some of these things before getting money from an IRA: Will you save money by making the early withdrawal when you look at your whole financial picture? Imagine the case of a family about to lose their home with no other options to save it. Their problems were caused by a one time medical emergency and now with money problems behind them the future looks bright if they can just stop the foreclosure. They exhausted every other foreclosure avoidance method and did everything to reduce their need for money to save the house but can not get that figure under $10,000. Imagine taking money from an IRA will cost $4,000 in penalties and fees, but by saving the house they save $20,000 in equity they earned in the home. $4,000 to get $10,000 sounds nasty at best, but $4,000 to save $20,000 might make sense. 401k plans offer more flexibility because your employer may allow you to borrow money from your 401k and pay it back. Think of this as loaning yourself money, because it comes from your own money you saved in the 401k. At the same time, be a good banker and do not loan yourself money unless you know you can pay it back.
  • Savings
  • Some might claim if you possess savings you do not need money, you have money. While this may hold true, when to spend your savings and what to spend savings on commands more scrutiny. It likely took a long time to accumulate that money and once you spend it years may pass before you can gather those sums of money again. I wrote in the past about who to pay when you can’t pay everyone, to deal with monthly cash flow, a similar priority system needs to exist in determining when and how to allocate savings. Do not spend money avoiding a late payment on a credit card only to find your savings depleted when you need money for the mortgage later. Look at the larger long-term picture not minor short term needs. Annoyance and belligerence levels of bill collectors demanding money for minor debts should never influence your long-term money allocation. Limited savings need to be preserved for dire emergencies like avoiding mortgage foreclosure or life saving situations.
  • Life Insurance or Annuity
  • Some life insurance policies accumulate cash value. Look for names like whole, variable, permanent or universal life insurance and contrast them to policies where no cash value accumulates like term or renewable. Owning a policy with cash value means you may borrow money against it or even cash it in. While cashing in a policy involves a much broader financial decision, borrowing money against a cash value life insurance policy or annuity can emerge as an inexpensive source of funds. Just be sure you can pay back the loan.
  • 0% APR Credit Card
  • Especially in situations where a person still has a good credit score and the only money problem involves a small amount of credit card debt, transferring the high interest balance to a 0% APR CREDIT CARD can do the trick. Pay down the balance as fast as you can on the new card and do not use the old card to run up more debt. I have a whole FAQ on 0% APR balance transfers to deal with debt if you want to learn more.
  • Unsecured Personal Loan
  • Getting money when you need it with bad credit and no collateral, the Holy Grail of the concept needing money, does it exist? Maybe, we certainly can define it; we call them unsecured personal loans. Unsecured means no collateral backs up the money borrowed, compare this to a mortgage where the value of the home supports the promissory note, read the secured vs. unsecured FAQ to understand this better. Personal means you do not need to be a corporation and a loan gives you money when you need money. There you have it, people who need money and may not have assets to support a secured loan, this kind of sums up many of the readers of this article. You now know what unsecured personal loans are, now for the key question, can you get one? As with any loan, credit does play a large roll in determining if someone will loan you money or not. If you still have good credit your local bank may even grant you an unsecured personal loan. Sometimes you can even get an unsecured line of credit that you can charge up and pay down and reuse whenever you want money for any reason. Even with good credit the interest rates on unsecured loans often run high. Unsecured loans with bad credit do exist. To get them you will likely need a steady job and owning a home does not hurt. Levels of money you can borrow never exceed $20,000 and more often expect to find even lower limits like $5,000 or $10,000. Figure on interest rates pushing on the legal limits in your state, 20% or more would not surprise me if allowed. With the bank meltdowns of 2008-2009 prospects for obtaining an unsecured loan with bad credit look even bleaker. Could you get an unsecured personal loan? You can click here to look into it. Should you rush to take an unsecured personal loan to solve your money problems if you do qualify? Don't rush into taking money like this just because you can. Pay attention to the recommendations at the start of the article, reduce your need and look to methods with lower interest rates, but if you need money and you qualify an unsecured personal loan can prove the perfect solution.
  • Family
  • This choice not only provides us with an option for where to get money when you need money, but in addition gives us a way to define need money. Many foreclosure clients resist asking their families for money because they do not want to face the embarrassment or shame that can sometimes go along with acknowledging money trouble; I authored another site that deals with the psychological issues related to money problems to read more on that. However, the distressing fact remains that unless swift action occurs and money gets raised, your family will surely learn about your money crisis when you give them your new address post foreclosure or worse when you have to ask if you can move in with them because you lost your home at a foreclosure auction. When you reach the point where you face a foreclosure date less than 30 days away and exhausted other options and your thoughts move even more toward not “if” but “when” you no longer have a house what will you do, you need money. Most people who end up asking a family member for money, particularly children asking parents or siblings, find understanding, compassion and financial assistance.
  • Friends
  • In cases where no family exists, family members’ lack available funds or the family refuses to help, you might turn to good friends. While some of the elements of dealing with friends work the same as family, like the fact that friends will ultimately learn about foreclosure if you move, do not expect the same compassion and understanding about money trouble from friends. Asking a friend for money may rank as one of the best ways to ruin a friendship topped borrowing money from a friend and never paying it back. Think carefully about whom you ask and how much you ask for, be sure you can pay back the money borrowed and do not push too hard or get insulted if they turn you down.
  • Advance From Work
  • This method may be dangerous and should not be used lightly. When you find yourself already deep in money problems the last thing you want to do is risk your income. Think about these things before asking and employer for an advance: Will I put my job in jeopardy? How long have I had the job? What kind of relationship do I have with my boss? How likely is it that I will continue to work here? What size company do I work for and do they have a history of making employee advances? How much do I need relative to my pay and when can I pay it back?
  • House Of Worship
  • You might never have imagined this as an option, but your local clergy might provide more than emotional help, they likely have money available for congregation members who find themselves in exactly your situation. In my experience, most times I saw this work one or all of these details played a part: the family regularly attended the religious facility, money needed had already been reduced and/or the money prevented the family from becoming homeless. Sometimes money came as a gift and other times as a loan either with a promissory note or an unwritten promise to repay if the family ever could. Especially in the case of grants, money available from a religious institution usually totals under $5000 and sometimes under $1000.
  • Local Housing Agencies Or Charities
  • Most times I have seen grants of money from charities for people who need money I witnessed some common threads. First without the money the people would end up homeless and second I never saw huge sums of money allocated for these situations, most times under $2500. If you need money and without it you will become homeless and you don’t need too much money you might take a walk down this route. Look for a local housing agency, the Red Cross, Salvation Army or whatever similar charity might have a strong presence in your area or neighborhood.
  • Auto Loan
  • If you own a car three auto loan options become available to get money when you need money. Refinancing cash out loans allow you to use equity in a vehicle just as you would with equity in a house. If you own a car without existing financing take a loan and use the money. Lastly, some states allow “Auto Title Loans” these nasty animals act much like a payday loan in that the fees and rates could choke you. Apply all of my warnings in the payday loan section to “Auto Title Loans” as well.
  • Sale Of Assets
  • Stocks, bonds, mutual funds, property, cars, jewelry or anything else worth money serves the purpose when you really need money. In deciding the merits of an asset sale think of some of these items first: What would you rather keep in the long run? If someone said you could keep your only car or your credit card, most people need that car, so selling an auto to pay a credit card bill would not make sense. What can you keep in the long run? If you face a court judgment where you know with great certainty the final outcome in time will result in seizure of your bonds plus paying significant legal fees, you might sell the bonds and settle the debt before you incur the additional legal fees. What could you keep in a bankruptcy? Never sell anything, if bankruptcy may be an option, which you could exempt in a bankruptcy filing. For example if you sold a car worth $2,000 to pay a bill and then had to file bankruptcy anyway, the court would have discharged your debts and let you keep the car, so selling it amounted to throwing it away. While others might disagree with this, I would say do not overvalue, monetarily or emotionally, items you feel will appreciate. If you need money to save your house, selling stock may be the right choice even if you think the stock will double in the next year, it could go down too and you need your house. Because you will see many ads on TV that specifically deal with selling your gold and jewelry to get the cash you need I want to take a minute to address such programs. First understand that none of these programs value the beauty of the jewelry, they base the value on the weight and grade of the precious metal alone. If your jewelry has value because of how nicely it might be designed or if it has special sentimental value it likely would not qualify as a good candidate for melting. On the other hand, broken jewelry or a single earing remaining from a set might fit the bill to get needed money. Once you have decided to liquidate jewelry you need to select your buyer. Local jewelers frequently make cash offers depending on the piece. By using a local jeweler you will know on the spot what the money offer might be and get the cash without a wait. Many firms now invite you mail your jewelry and they will send you a check. Some people emerge very happy with these services while others feel they have been taken advantage of. Look at the individual firm and check them out. Look for complaints, see if they belong to the Better Business Bureau, try to know what your jewelry might be worth and use the window of redeption to ask them to return your jewelry if they have not offered enough money. Be sure to pay careful attention to what they say and be on your toes if you sense trouble.
  • Pawnshops
  • One of several alternatives of last resort for when you need money, pawnshops offer a fraction of the value of an item and allow you to reclaim the item after paying back the money advanced plus high interest and other charges. If you feel you need to consider pawning items, I bet you need to examine bankruptcy as an option, because most things you might pawn would end up exempt in a bankruptcy. When you add to that fees like a payday loan pawnshops almost never emerge as the right way to get money when you need money.
  • Payday Loans
  • I hate payday loans. They take advantage of people who do not understand them and exactly the people who can afford them least. Could my disgust be unfounded? Many members of congress agree with me, as do many state legislatures who outlawed payday loans to protect their own citizens and the Federal Trade Commission. Let’s examine what payday loans are and when, if ever, people who need money should use them. Folks with a steady income ask for an advance from a payday loan company. If approved, and even with bad credit it’s easy, the money goes directly into your account and your next paycheck goes to repay the loan. On the surface it sounds OK, but let’s review the details. Imagine you borrow $1000 for a fee of $50. The next week you pay it back. Even when payday loans work well, the Annual Percentage Rate of interest on that money would be over 250%. This example ranks as consumer friendly compared to other payday loans that can run as high as 1000% APR. If that does not scare you, look at the payday loan companies try to lure you into. Taking one loan makes them money, but when they can get someone who cannot pay the loan back and they need to “roll” the payday loan into another payday loan, and another and another they make a killing at the expense of the poor consumer who needed just a few hundred dollars. In the end that $1000 loan could cost $5000 or more to pay back after just one year. Can a payday loan ever be the right thing when you need money? Rarely, keep these things in mind: Make sure your next paycheck will not only pay off the payday loan, but that you absolutely will not have to roll it into another payday loan. Make sure the fee makes sense. A $50 fee may be less than a $200 penalty faced if you missed the payment you are borrowing to make on time. Look at the downside of not taking the payday loan. If you will annoy a creditor who won’t be paid on time, it may not justify a payday loan. When you can save a house from foreclosure with a one time payday loan that will not need a rollover maybe it could be an option to get your money. That rarely ends up being the reality. If you feel after reading this that a payday loan suits your needs, be extra careful and keep your eyes wide open before asking for payday loan money.
  • Ways To Get Money You Should NEVER Use.
  • Gambling, lottery, get rich quick schemes, stealing, dealing drugs or other criminal activities.
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For information on retaining or consulting with Mory Brenner, Esq. please visit the contact page.

Nothing contained herein should be construed to constitute advice for your personal circumstances. This is intended as a peripheral exposure to the various options available, but by no means is this a comprehensive or exhaustive analysis of the bankruptcy laws or their alternatives. Whether or not you should file a Chapter 7 bankruptcy, Chapter 13 bankruptcy, or any bankruptcy, will vary depending on your personal circumstances and should only be undertaken after careful consideration, analysis and after consultation with an attorney experienced with such matters. These pages may contain information and rules peculiar to the Commonwealth of Massachusetts.

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