Would you sell your house to pay off your debt

wren5892

Three years after my divorce and working part time, my debts had increased slowly but surely to £15,000 as I tried to stay in the marital home. As this debt was on a credit card at a high interest rate, I couldn't even afford the interest and so the debt continued to increase. I then sold the house and bought another 40,000 less than the value of the one I sold, therefore thinking I would be able to pay the costs of buying/selling and pay off debts. If I had stayed in my previous house, by now the debt could have climbed to well over £20,000 and would continue to do so. The house I am now living in is smaller, worth £40,000/£50,000 less and I have the same mortgage! As my children are older, I work full time, I have no debts, and manage to live on my income without debts continuing to climb and the worry of this. Good luck.

steve_terry

patchwork_cat wrote: »

Without doubt. Get out and start again, clean slate. Peace of mind and not having years of hardship is worth a lot. Only thing is learn from it and don't get in deep again as it will be a while until you have that sort of equity in a property again.

I sold my house earlier this year and I can honestly say it was the best thing I ever done.
Over the last 10 years since we bought the place we have racked up debt and paid it off with cheap loans. We bought the house in 1999 and I done a lot of work on it over the time which all cost money which most of us don't have. With the advent of cheap credit, and the cash we came into plus around 10 credit cards that I had aquired over time, we had it all. We went on holidays to places like Australia and Jamaca, we partied all the time with many a boozy night in classy hotels on weekends away. We racked up the bills and paid them off with cheap loans when money was easy.
To understand why I did all these things you must appreciate that as a person brought up in the 60's and leaving school in the 70's, these were times when money was hard to come by. When I got married we went from one down turn to another, always struggling to make ends meet, never going on holiday or going out.

In 2009 I had a drop in my earnings and things started to slip. I struggled to keep up payments on debt and there were many time I had to borrow from credit cards to boost my account so I could meet my comittments.

We decided to sell the house and move into rented. I worked out all the cash and it took us a year to sell up. I had to drop the price due to the market and ended up taking some of the debt with me. Since the move my life has changed completely. The debt that I hold isn't giving me any pain as it is managable and the cash is piling up in the bank. We moved close to our work so we don't have to run a car which is to expensive these days anyway. I must say I sleep really well since the move.

When you think about it you don't own the house you buy unless you buy it outright and by the time you pay for it in most cases your to old to enjoy it. People say that in rented you can't decorate or alter the place your living in. To me thats just hard work and I can think of better things to do with my time these days than DIY

I don't regret what I did now as without it I would not have had the great times I had and saw the places I saw. When I'm old and can't get around anymore I can look back at all this and say at least I did that and had a great time while it lasted rather than just sitting at home trying to pay off the mortgage. I am now planning my next move and saving toward my retirement at 62 and I'm looking forward to it.
I've also started to re learn how to use cash again, when you have cash instead of a card you can see the true scale of what you are about to spend. It's surprising how many times you look at something you think you need and find yourself walking away. With a card you simply hand it over without to much thought.

This is my story, I hope it will be of use to someone else planinnig the same.

littlekitty2010

I would sell in a heartbeat if you dont like it anyway.

elizabeth0701

Hi, me and my other half have around £50k worth of debt, we are currently paying this back through a DMP through the CCCS but it is going to take about 12 years to clear.

We live in a 2 bedroom house worth around £110k and have a mortgage of £86K. We have 2 children, a 11 year old and a baby of 17 months who is still sharing our bedroom! We desperately need a bigger house but the mortgage company won't transfer the mortgage we have to another property and they aren't doing any new lending even though we have never missed a payment in 3 1/2 years. Obviously it's unlikely we would get a mortgage from another lender due to the DMP.

So the only option we can see is to sell up, rent a bigger property and use the equity we have to get pay off as much debt as we can by offering a reduced amount in full and final settlement.

If anyone can offer any advice or has had a similar experience good or bad I would love to hear from you.

Also if anyone has any experience of Full and Final settlements for example what percentage a company is likely to accept that would really help also.

Thanks

SUPER_HOOP

I got made redundant 2years ago and as a result ran up morgaguge arreas and debts,i have taken the decision to sell our house pay off all the debts and rent for 12mths .

we exchange contracts this month, it was not an easy decsion to make but we have a lot of equity in the house (6 figures sum) and my debts amounted to 20k (inc morgauge arreas)
I worked it out that even paying an extra £100.00 a month then consoladateing the arreas after 6 mths any intrest rate rise would set us back to were we are and we would still have the debts .
I have a full time job so does my wife but our earnings are now no were near what they were so the morgauge has bcame unafordable .
We are going to sit tight on what we have and see what happens in the next year, we can rent cheaper than the morgauge and with no debts to pay should be able to enjoy life more and start to put some money away for the first time in years.
Hi Elizabeth we have done just that we approached our creditors and offered a settlement figure they will either accept it or return a figure they will accept , its sometimes call a part settlement in full and is marked as settled on credit score as so.

Clarie_2

Tiger_greeneyes wrote: »

You sound like you've had some nightmare landlords, HairyHand I lucked out on the first property I ever rented - the landlord was a peeping tom and would think nothing of letting himself in whenever he wanted and standing for 20 minutes at a time with his finger on my door buzzer. At 2am. When I moved out, I didn't pay the last month's rent because I had a nasty feeling he'd have not given me back my deposit. I was a good tentant btw, the flat was in a much better condition when I left than when I took it on and I paid my rent cash and six months in advance.

There's a deposit protection scheme these days to make sure you get your deposit back. I wouldn't rent a property without the guarantee of this scheme.

How horrendous! Thankfully, that's completely illegal now - if your landlord enters without permission and 24 hours warning you can take them to court for trespass. And as for calling on you at 2am, that's harrassment, and again you can take them to court for that.

If you don't get written proof of the deposit protection scheme within 14 days (I think) of moving in, then when you leave you can claim 3 times your deposit back - pretty much regardless of the state of the house. So if you don't get guarantee of the scheme, it's even better.

Silvafox

I would and I did.

Best thing I ever did...

Verbatim

I wouldn't sell. Not now, not yet.

I'd say that the first and most important thing would be to get the budget under control and to start paying off the debt. If you sell and repay no habits will have been changed and it's likely that the same spending habits will continue. Also if you have valuable equity and unsecured debt it would seem a backward step in life to use the former to pay off the latter. By all means move, use the equity as a deposit for a more suitable property, but buckle down immediately to paying down the debt so that you have you spending under control first.

Silvafox

elizabeth0701 wrote: »

Hi, me and my other half have around £50k worth of debt, we are currently paying this back through a DMP through the CCCS but it is going to take about 12 years to clear.

We live in a 2 bedroom house worth around £110k and have a mortgage of £86K. We have 2 children, a 11 year old and a baby of 17 months who is still sharing our bedroom! We desperately need a bigger house but the mortgage company won't transfer the mortgage we have to another property and they aren't doing any new lending even though we have never missed a payment in 3 1/2 years. Obviously it's unlikely we would get a mortgage from another lender due to the DMP.

So the only option we can see is to sell up, rent a bigger property and use the equity we have to get pay off as much debt as we can by offering a reduced amount in full and final settlement.

If anyone can offer any advice or has had a similar experience good or bad I would love to hear from you.

Also if anyone has any experience of Full and Final settlements for example what percentage a company is likely to accept that would really help also.

Thanks

You need to start your own thread...

Mistym5

Hi thinking of selling house to Clear 15k of Debt. A family member looking to buy house. When selling would the buyer know we have debt and bad credit history.