Major life changing decision!!!!!

dreamer67

Hi

I've got my house on the market to sell as I can no longer afford it. I will stand to make a substancial profit from sale but not sure what to do as I have outstanding debts, which all have arrangements on them for £1 each and pay no interest on them.

If and when I sell the house, should I pay off all my debts and start again, leaving me with very little? or should I invest the money and continue with the arrangements outstanding?

It's a more difficult decision as I dont want the commitment of buying another house straight away and need some time to plan for the future. If I pay them all off I would never be able to have the money to buy again but do I want to???

Would like to take a year out (maybe travelling) just to reflect and think about the future!!!!

Feeling very confused.......Can anybody help or advice?

Thank you for reading and any advice you can give

kat79

Wow. What huge decision! Have you got a place to live once the house is sold?

dreamer67

Hi
No, not at the minute but I am happy to rent for a while. Ideally, I would love to take some time out abroad as I have always had responsibilities and been very stressed because of it and would just love a bit of time out of the rat race. My employer would give me a career break.

lynzpower

I sold my flat for 2 reasons to clear a bit of debt ( not a huge amount, I could have paid it off in 6 months by carrying on) but mainly because I projected interest ratess rising and it would cost me more.

I had to think, is it REALLY worth 1500 to "own" a flat ( he bank owns it for many years until you pay off!) when to rent is half that? The answer was a resounding BIG FAT NO.

Im stuill quite young ( just under 30) and I too fancy some time abroad, if not emigrating permanently. Having the money in the bank gives me those choices. I saw a job in bankok, theres nothing to stop us just upping sticks if we fancy it :j

the freedom I have now I dont have a mortgage is utterly priceless. to rent- I know what my rent will cost for the next year. Comiong to the end of my fixed rate mortgage, it would have been anyones guess what it would have cxost me ( even my scary predictions would not have met what the IRs are at now,)

I now have ££S in the bank and have the freedom to travel if we like, but its also meant that OH can take a job significantly less pay which he LOVES, hew would have never been able to do that with the mortgage.

"getting back on the property ladder" really only has truth if you believe that house prices are continuing to rise. they arnt. even in london they are falling. I work in property and I know a fair amount about it.there are many many people now struggling to sell, ( hopefully you wont be one of them ) as now fewer buyers can afford those top prices due to IR rises. the market is topping IMHO.

Is owning a home more important than other things you want to do in life? this is the question you need to ponder. to me owning the flat would have taken precedent over
*our career- have to keep in the rat race constantly seeking promotions etc to stay afloat
*having kids - we couldnt - we need both incomes to pay even an IO mortgage
*travelling- cant be done - financially or practically ( my lease forbidded subletting)
*moving round the country, or even abroad
*couldnt have pets in my flat so OHs dog had to stay with his folks- not ideal

We now have a cheap rent in a great place with the dog and the freedom to puruse whatever goals we want. Now the bank pays US money as opposed to vice versa.

I donlt think Ive paid any financial instutution anything for about 5 months. they however, pay me every day. That is worth celebrating :beer:

lynzpower

definatley pay your debts off - crikey I cant belive you would use money on luxury like travelling to pay debt off.

Once you have lower overheads- save for travelling!

dreamer67

Thanks Lynzpower,

I really enjoyed reading your reply and it definately hit home to me. I feel like my whole life has been taken over by the importants of owning a home and yet I dont live just pay bills and live from one month to the next and I hate it.

I am older (40) but am still very young at heart and want to start enjoying life before it's too late. You have definately made me feel more positive. Still concerned about the money side though. As if I pay my debts off in full I wont have a lot left but if I dont pay them off, even if I am abroad, will I feel free or still be living in guilt!!!!??? and then if and when I came back would they all be chasing me for money I didnt have?????

lynzpower

exactly. Of course they will chase you for money you have spent- and voila, youll have a nice collection of CCjs anbd what not, and then any chance of getting a mortgage later- is likely to be significantlymore difficult and expensive.

How much is your debt, how much will you get from the sale of your house.

dreamer67

I wouldnt spend the money on travelling as I would work. I would just invest the money for when I came back, then i could pay the debts off, hoping to have made money in that time.

dreamer67

Profit £40k, debts £30k!!!!!

lynzpower

the thing is what you can do, as you havnet been paying off your debts for a while is offer FULL & FINAL SETTLEMENTS

that is you offer the creditors less than they are asking for. If your debts have been passed to debt colectors then you can then offer about 1.3- to 1/2. so a ten k debt on F&F should really expect to cost you about 5 if not less.

have a search for full & final settlements, you will see the info you need.

for you to go travelling ( how wil your creditors contact you?) could be like sticking 2 fingers up to the DCA/ creditor and they are likely ( i know i would) bto give you very short shrift.

dreamer67

I know what you mean, think it's gonna be the best way but need to find the cheapest way to pay them off so I dont lose everything. The alternative would be to keep the securtiy, the house, the equity in the house and continue to pay the arrangements, none of these debts are secured on the house?