Debt burden stopping me travel

Poolman99

Hi I'm in a good job, single, own a house a car etc but am really bored, and feel like I'm on a hamster wheel.

I want to go travelling for a year (at least) but am a little tied down by some personal debt
I am going to sell the car to give me cash with which to travel, and I'm going to let the house to friends to pay the mortgage (with possibly up to £60pm surplus).

Cullumpster

I don't want to sound horrid, but if i was you, i'd wait until you sort yourself out before going travelling.

If you are selling your car, why dont you pay that money towards one of your debts, and then maybe go away next year when you are little financially better off ??

Robert_Sterling_3

I think many people without any debt would also like to go on holiday for a year or even a weekend.

ms_london

I completely understand how you feel as I would like to go travelling too. However, I would rather pay off my debt first & then travel, knowing that I dont have to worry about debts being paid while im away & also means if i dont want to come back to the UK after my planned year then I dont have to.

My loan is due to expire December 2009, however, i will be making a huge payment of £745 a month from January so that I will be debt free by December 2005 - then I can save & go travelling, knowing that I will be debt free, therefore enjoying the experience to its full extent. Next year is going to be tough, but im determined to do it!!

Let me know what you decide to do!! Good luck!!!

nh

Even if other people here aren't sympathetic to your situation, I am! The hamster on the wheel syndrome? I love my job but I still can't wait until next year when I can have a baby and can give it all up!

Anyway, the student loans company I am sure will defer your payment, because if you have no income you can't pay, although if you give up work voluntarily... I don't know. You must ring them to ask!

You CAN tell your creditors you are going away, they have already leant you the money so what are they going to do? They can't force you to stay here.

You could ring them and ask if they would also defer your payments till you get back. They can only say no - and they will make more money out of you in the long run if they allow you to do that because you will pay far more interest if you don't pay anything off your debt for a year.

If they won't do that, I suggest saving up enough to service the debt for the year, leave it all in a bank account with DDs set up to pay the debts, then you won't have to worry about them.

I would seriously consider paying off your debts first and then going travelling though - maybe you could sell your house? With the market on the downturn (although nothing is guaranteed) you might be able to return and buy a similar house for less.

You have to consider your future, but you also have to live for now. Maybe you could sell up, pay off your debts, go travelling and start again (in terms of a job, home, car loan, bills etc - the direct debits that get us all down) when you get back debt free. Good luck!

Robert_Sterling_3

Good luck.

dag_2

I don't want to sound horrid, but if i was you, i'd wait until you sort yourself out before going travelling.

I'd say that too - but if you're going to travel, then you're going to travel, and no-one's going to talk you out of it. So it makes sense to minimise the financial impact.

About £4k is a student loan, and although I've been repaying that for two years now, will they let me defer at this stage (due to low income)?

The fact that you even ask this means, presumably, that you have one of the old-style student loans?

With the new-style student loans, you don't even have to apply for deferment. You are charged 10% of all your earnings above a certain level as a repayment, until the balance is cleared, and payment is collected by the inland revenue. If you earn nothing, you pay nothing - no questions asked.

It's only the old-style loans that require deferment applications. As long as your income is below the applicable amount, your deferment is awarded. nh says ...

although if you give up work voluntarily... I don't know. You must ring them to ask!

To be honest, I think nh is confusing the student loan deferment application with the Jobseeker's Allowance sanctions regime. Whether you quit work voluntarily or not makes no difference whatsoever to your deferment application.

Even savings and investments don't count. You can be a millionaire and get away without paying back your student loan, provided you don't have an income.

If they won't do that, I suggest saving up enough to service the debt for the year, leave it all in a bank account with DDs set up to pay the debts, then you won't have to worry about them.

perfect advice. Better still, you'll make sure you have telephone and internet banking set up before you go, so you can check it proactively. It depends how worried you are about having penalty charges put on your account, and how confident you are about being able to negotiate their cancellation later on.

Do you have any equity in your home? It might be cheaper to remortgage it and clear the plastic completely. Is there an early redemption penalty on the Cahoot loan?

How much are you bothered about the possibility of not having a home to come back to after your travels anyway? I think it's better to sell the house and stash the money in a savings account than run the risk of repossession.

Letting the house is all very well - but you need to be prepared for the possibility that your friends won't move out without formal notice - which may take up to three months if you let on a periodic assured shorthold contract, and possibly longer if you let on a fixed-term basis - during which time, you will have nowhere to live. Illegal eviction can attract custodial sentences, so is not recommended unless you're really desperate.

That said - provided the house isn't in a street where half the other houses are boarded up, you should be able to sell it fairly easily, even if it does have tenants still in it. But you might be better off selling it before you go travelling, especially seeing as the market is beginning to get jittery right now. I might be wrong on that.