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Selling house to pay off debts - am I doing the right thing?

My husband and I owe over £100K in unsecured debt. We have this much equity in our house and so have put it on the market.

We are planning to sell, use the money we get to pay off the debt and rent for a while whilst building our credit rating back up. We hope to be in a position to buy again within 2-3 years time. We both earn good wages and so the future does look much brighter if we do this. I can't think of an alternative solution - we've looked into going bankrupt and IVA's neither of which would work for us, especially as we both work for a large bank and so would surely lose our jobs.

I'm sure there are lots of people on this website who have done a similar thing - any advise/pitfalls we should be aware of?

Comments

  • Annie_Fanny
    Annie_Fanny Posts: 1,167 Forumite
    Hi there and welcome!

    Selling your home does sound like a good idea but have you addressed the issues surrounding why you got into debt in the first place? Once you paid off a majority of the debt or all of it are you confident that you can live within your means once again?

    Maybe it would help to post up your 'Statement of Affairs' (SOA) here so we can help identify areas to cut back on? It may help pay for some of the costs associated with moving home? Have a look at this post for details of posting an SOA:
    http://forums.moneysavingexpert.com/showthread.html?t=107280

    Good luck with your plans.

    :)

    Annie
    "Debt makes plans for you" - A quote from my friend Catherine. How true!
  • Thanks for your reply.

    We basically got into debt as we want everything now - it has taken 12 years to get to this stage! Been very foolish for far too long, and will definately not get back into this situation again. Once the debt is down to a more managable level, we earn plenty to still have a nice life and continue paying it back.

    I have looked where to cut back on - to be honest the only place seems to be Sky - almost every other penny goes on paying back the debts. I take my lunches to work, have a work mobile phone which costs me around £20 every 6 months and always make sure I claim back my expenses.

    My husband does smoke which he is trying to quit, for no more of a reason than our first baby is due in 10 weeks - so we'll have nursery fees in a few months time. To be honest, this is what has given us the kick we needed to get the house on the market. We probably won't be able to have sky in a rental house anyway, so no choice in the matter.

    We decided last night that sky is going this weekend. A massive saving over time.

    House hunting next job, just hope we don't have a problem with landlords/agencies should they do a credit check on us.
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