Should we sell house and rent to pay debts

madlady_2

hi we have been struggling for over a year now to meet all our payments, we are in debt so much that we have no money left over at the end of the month and sometimes are borrowing of my parents to even meet payments, we have 3 youngish children and can never take them anywhere, we owe about 156k on our mortgage and if we managed to sell for around 210K this would pay of all our debts, then we would rent
the thing that worries me most is then as of our credit rating we would struggle to find somewhere that would take us on and we would never be able to get on to the ladder again, but then most loans we have run for another 8 years then the kids will be so much older then, of us having nothing
we have already sold the car to raise last months payments
has anyone ever dont this and came out ok the other end?? am getting so stressed and worried about it ... thanks in advance

climbgirl

Can you please give us more information about your debts and your income & outgoings? Everything you owe, everything you earn and what your expenses are.

That will help paint a more complete picture and we will be able to advise you properly.

hostie

SOrry to hear about your stress. I don´t think you should sell. Your home provides your family with some security and could also potentially help you when you get older. Renting would be less secure and you would have less controll over some of the basic things that keep your family comfortable (repairs, maintenance etc). Have you done a SOA (a post with all your income and expenditure) there might be some other ways that you could ease your situation.

Norfolk_Jim

I've thought about this too, and while at first it might seem a bit unpalatable, there are some very nice static caravan parks out there. I've thought of selling up and getting one of those. I had hoped once the family was away on their own two feet of getting 2, one in Devon and one in Blackpool or Norfolk and alternating between the two.
I guess it depends on how important it is to have your own bit of property. Renting concerns me because you are always at the mercy of the owner so may never be settled. It does not worry me the idea of not having anything left to leave when I'm gone - both my parent died penniless and I love them no less for it. Good luck - at the least, its good to have options.

lookingforthelight

Hi,

Don't panic, there is always a way.

If you are not already, then you need to set up reduced payments with all your credit cards & loans. Call Payplan or CCCS they will help with a budget and talk to your creditors to set up lower payments. Neither of these charge a fee. They will also tell you how long it may take to pay off all your debt at the reduced payment level. Obviously over time you would try to increase this and/or make extra one off payments to bring this debt free date forward.

You may be OK with this reduced payment plan to not need to move.
If you are still too tight on reduced payments then yes, look into selling up and renting.

Look up your credit file through one of the free trials to see if you have defaults yet. If you do, then its too late to do anything about your credit file. No matter what action you take the defaults will stay there for 6 years. There are threads on here about things you can do to improve your credit file from the 3 year mark - they dont wipe off the default but start reducing the impact defaults have.

If you sell up and pay off all the debt before defaults then you will only have late payments marked on you credit file. This is pretty harmless compared to defaults & CCJ's.

By renting you're off the ladder but at least you don't have the stress of the debt. Obviously you want to try and save as much as you can for a new deposit for a house. This may take quite a while but I look at it as either taking time to pay off debt or time taken to save up (and while your saving your credit file is improving/defaults getting older).

Another way of thinking about your situation is that you are pressing the reset button, going back to square one. Same as if you had just left home starting out. Think about the path you wish to go down and not make the same debt mistakes again.

Don't forget that even if you decide to rent you MUST have a complete, realistic budget - allowing for everything like christmas, kids clubs, all the little things. Otherwise you'll get into debt again.

P.S I have just put my house on the market to do just what you are thinking of.

Good luck

Trollfever

Escaping from the mortgage debt pit whilst you still can does have benefits.

ETA.

How many days a month do you have to work to just pay the interest that feeds the fat cat bankers?

dreamdreamer

Any chance of downsizing or buying in a cheaper area to get the equity out?

jennikitten

Norfolk_Jim wrote: »

I've thought about this too, and while at first it might seem a bit unpalatable, there are some very nice static caravan parks out there. I've thought of selling up and getting one of those. I had hoped once the family was away on their own two feet of getting 2, one in Devon and one in Blackpool or Norfolk and alternating between the two.

My family had one in Wales and it was £30k for the static caravan and at least £3k per year in park fees plus the cost of gas etc. Not really that cheap, especially if you're getting 2. They also decline massively in value over a short period, like cars.