Wanting to be debt free....is this the only way?

mon1o

Hi everyone! Im new here have posted a couple of times (inc on the how did you get into debt thread on this board). To cut a long story short out of our own stupidity my husband and i have run up debts totalling £35000 on cc, loans, overdraft and consolidation loan. This is as well as a mortgage of £42000 (now around £38000).

Im a student nurse and dread to think what our credit score is. We need to be debt free due to me being pregnant (not good timing i know but accidents happen) and needing a larger house. The only thing we can think of to clear our debt is to sell our current house (have got 2 valuations lined up) and rent a larger one to increase our credit score by paying off our debt with the profit from our house and obviously being on time with rent and household bills.

Has anyone else done this? Im due to qualify in march 2009 and provided i can get a job somewhere hopefully we will be in a good position to buy a house soon after.

I cant see any other way of us becoming debt free but our families think we are stupid for contemplating the idea (granted, they dont know our situation)

Thanks for any help in advance,
Monica xx

fiveyearplan

How much is your house worth. I would have thought it better to remortgage and pay off debts if possible.

In_Search_Of_Me

I would post your SOA & people will be able to (hopefully nicely!!) pick it to pieces & you can see whats what. Meanwhile get the valuations so when you make a decision wit will be an informed one....It all depends on you OH's salary & where you can cut back really! HTH? When is the baby due? Lots of advice on DFW babies/saving money on the site- have a look round! Welcome & good luck!

liz105

Are you aboslutely sure you could not have a baby where you live at the moment? Do you not have a second bedroom or room big enough?

I would say for a start DONT CONSOLIDATE, post an SOA and we can see what we can do for you. Your very lucky to have such a small mortgage, paying off everything in full may not necessarily improve your credit score overnight, you will need to work at it over a period of time.

HairyHandofDartmoor

Our baby slept in our room for at least a year, which would buy you some time. Don't rush into consolidating as it is not always for the best. Post your soa as others have said and you will get some very specific advice on how to save money.

RAS

Hi

Well done to facing up to the problems.

it is difficult to advise you at the moment. Can you put up a Statement of Affairs and people can help you.

have a look at Southern Scousers post for first timers here http://forums.moneysavingexpert.com/showthread.html?t=107280

Also check the following;

Martins advice on credit rating - see the tab for cads and loans, so you know what the situation is. You can both get them free if you follow his advice.

Go to www.entitledto and work out what you would be entitled to when the baby is born.

And.... will you have the baby before you complete? As you would get paid mat leave form the SGU.

**thecauntmeister**

I was in a similar position 3 years ago - a 2nd year student nurse at sheffield and pregnant! Dont rush into anything until the baby is born - things change soon after. I decided not to go back into it after my little un was born and take a break, you can return to nursing whenever- theres no time or age limit! I would aviod rushing like I say until baby comes along but if you only have a small mortgage, it may be better to consolidate as we have.....We have just consolidated 30,000 worth of debt and added that to our mortgage which is now a staggering £160,000! hate actually seeing that figure but hey ho! really hope this helps!

oooh - and worth remembering - the longer you stay in your house, the more it will be worth in the future. Dont sell now because times are hard and rent another house as the property market will still rise while you are renting and leave you with zero deposit if you use the profit from the sale of your house to pay off your debts. Then you would end up back to square one with massive mortgage because of the rise in house prices and no deposit x