Reprinted with permission from No-Debt Living, copyright 2000 No-Debt Living. Robert Frank is editor of No-Debt Living, www.nodebtnews.com, which provides financial, consumer and time-management news with a Christian perspective.

Q: No-Debt Living/Crosswalk: What are your thoughts about using debt consolidation loans and home equity loans to clean up credit problems and lower monthly outgoing payments? J. T.
A:No-Debt Living: Thank you for your letter. My view is that consolidation/home equity loans are fine, AS LONG AS the people entering into them have identified and addressed the root cause of the problem that got them into their current debt position.
In most cases, unmanagable debt is merely a symptom of a much larger problem. And the root problem is often related to a spiritual issue. Suffice it to say, there are a multitude of possible causes (here are a few):
-- lack of financial planning, (Proverbs 24:27)
-- no written budget,
-- lack of control in spending (Jeremiah 17:9)
-- misperceptions regarding ownership (Psalms 24:1, I Chronicles 29:11-12)
-- lack of contentment (I Timothy 6:5-19)
-- unwillingness to wait for Lord's provision and timing (Matthew 6:19-33, Ecclesiastes 3:1-8)
-- lack of understanding or training in managing money
-- unwillingness to seek counsel (Proverbs 11:14)
-- unrealistic expectations (I John 2:15-17)
-- unaware of God's principles and promises (Proverbs 8:12-19)
-- unfaithfulness in stewardship and tithing (Malachai 3:6-12)
As Larry Burkett has said so many times, how we handle our finances is an outward sign of our inward or spiritual heart.
If someone doesn't identify and correct the root problem causing their financial dilemma, they are destined to fall back into the same pattern after their home equity loan provides initial relief. The problem is, this time around their house is on the line.
In other words, if they fall back into the same pattern, they could lose their house.
This is a relatively common scenario. Evidence can be found regularly in most daily newspapers, where you will see reports on record debt levels, bankruptcies and foreclosures.
Consequently, I recommend that BEFORE people take out any home equity loan, they identify and correct any root problems, and that they establish an acceptable, written working budget.


(By the way: If youre looking for a great tool to help you develop and maintain a budget, look into Money Matters 2000 software. There is a review of it on our website at www.nodebtnews.com.)

Hope that's a help.
God's Peace,
Robert E. Frank, editor, (rfrank@nodebtnews.com)
No-Debt Living
"Training godly stewards to touch the world for Christ"
www.nodebtnews.com

For more money-saving ideas visit No-Debt Living, www.nodebtnews.com, where you can view more than 100 valuable articles and resources on financial, consumer and time-management news with a Christian perspective. Copyright 2000 No-Debt Living.