Selling up to clear debts

I'm sure this has come up before, but would value some advice. I have around £40k in equity in my flat and 13k of unsecured debts. And ironically a reasonable credit rating. I've been card juggling and they keep offering me more credit on my 0% balance transfers. I've switched some of the debt to a 5.9% for life deal and aim to get the rest onto a 4.9% bt for life. I'm barely making minimum payments each month.

I own my car outright, which I use probably once a month for a really long journey and costs me £43 in insurance per month without all the other costs associated with it. It's probably worth around £800 on the open market. I use it to get to national events for an organisation I'm associated with, which I hope will bring me income and a job in an area I'd love to work in.

I lost my job last October and am temping doing work I hate at antisocial hours and earning 25k per year p/t. I'm also trying to get work as a writer.

I've seen a deal where a company pays £700 towards a mortgage for 2 years on a new development. Am I being insane thinking I should sell up here and opt for it? I'm also considering letting my place out and going to house sit for 6 months somewhere. That's my best thinking so far...since my thinking has brought me to this state I thought I'd seek advice here...

Thanks

Comments

  • Rafter
    Rafter Posts: 3,850 Forumite
    First Post First Anniversary Combo Breaker
    If you only have part time income you may find it tough getting the property deal.

    You really need to find a way to increase your minimum payments and start eating into that debt.

    I'd suggest selling the car and hiring one for these long trips or using public transport. With fuel, tax, servicing and other costs it is probably still a significant outgoing for you.

    Writers are notoriously badly paid with journalists typically earning <£10 a year.

    How big is your flat? Could you rent a room out for a bit to get some additional income?

    Given the amount of equity in your flat you could remortgage and spread your £13k over a longer period, but that isn't really advisable. You really don't want to still be paying it off in 20 years time.

    Good luck whatever you decide.

    R.
    Smile :), it makes people wonder what you have been up to.
  • Thanks Rafter,

    I'm working 4 nights so do have an income that I'd get a mortgage on. I've downloaded Martin's guide to remortgaging and have allocated Saturday afternoon and a jug of coffee to reading it. Then I'll revisit the budget I neglected a couple of months ago. Included in that will be alternative methods of travel. A bike would do wonders for my derriere.

    I love the idea of being out of debt. I agree some writers are badly paid - it doesn't have to be the case though. I can think of at least one journalist who's pretty successful and astute financially ;)

    I think the core is spending less than I earn. I read a post here about someone who'd sold up 'contrary to advice on this forum' and am wondering why people would advise against it.

    As I said, I do appreciate input, I wouldn't ask for advice if I didn't want to receive it.
  • chrisxr2
    chrisxr2 Posts: 150 Forumite
    What job do you do part time to earn 25k a year? I am amazed you have got into so much debt, i earn 23.5k and am debt free and i also run a car and a mortgage.
  • headchef
    headchef Posts: 178 Forumite
    You do write well. Really well (but you probably don't need telling that)!
    £16,500 in debt.
    New debt free date: 2015 (was 2046!!).
    Thanks MSE for helping me budget and therefore increase payments from £30 per month to £150
  • headchef
    headchef Posts: 178 Forumite
    PS. I've worked with some very average copy writers.
    £16,500 in debt.
    New debt free date: 2015 (was 2046!!).
    Thanks MSE for helping me budget and therefore increase payments from £30 per month to £150
  • Thanks Headchef...if you need any more writers, please drop me a line, I could do with boosting my income...;)

    In answer to chrisxr, I sell my soul to nightwork, which carries a premium payrate and free bags under your eyes. Wish I had your nouse and an exciting tale to tell of getting into debt. I spent more than I earned. That's all. Am working at getting out of it.

    Just whizzed through the coffee and remortgage guide. Am amazed to discover I'm paying .39% above the base rate, so not on such a bad deal....er...I think.

    Does anyone know anything about how to go about house-sitting? Thinking that maybe I can let my place out and go and live somewhere for nothing for a few months.

    Also bought lots of cheap pocketbooks to make sensible 'to do' lists. Number 1 is produce a statement of affairs. Rafter, I don't have a spare room, so the landlady thing is a no-no.
  • Malestrom
    Malestrom Posts: 983 Forumite
    Here's some house/pet sitting sites to be getting on with. Most people just want their property 'sat' whilst on holiday, so finding a long term sit may be difficult.

    Minders Keepers

    Safe Hand Sitters

    House Sitters

    Caretaker

    House Carers

    While-Your-Away

    Personally I wouldn't advise on selling your own place, you're better off trying other methods (like housesitting, very novel!) to increase the available income that you have to throw at the debts.
    He huihuinga taangata he pukenga whakaaro – A meeting of people; a wellspring of ideas (Maori proverb)
  • I'll check these out, thanks Malestrom. Looks like there's a huge redevelopment project going on in my area, so values are likely to go up in the next 5-10 years. will do everything I can to avoid selling up. Just did a very tight budget for this month. looks like I can do this month without spending more than I earn. a start.
  • meanmachine_2
    meanmachine_2 Posts: 2,624 Forumite
    First Anniversary Combo Breaker
    I wouldn't bet on house values going up and up and up, just because they have in recent years.

    In fact, many economists are predicting 5-10 years of stagnation while wages catch up with house prices.

    However, no one really knows where they're going so it's best not to factor either rises or falls into your sums.

    Sadly my advice is not to do anything but cut down. Your wage would seem very generous to some. I'm afraid you simply spend too much. Don't sell up. Don't rent your place out. Cut down and focus on clearing your debts.

    Budget, budget budget.

    There is no easy solution. Juts a very boring one that you have to stick to. Sorry.
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