downsizing to pay off debt

geegeejune

I have been lurking on here for many years but not said anything out loud. Unfortunately we are in a real bind and owe a huge amount across several credit cards.This has been happening over a long time, largely due to funding our daughter's dancing dream and borrowing Peter to pay Paul. We have consolidated several times but despite that and living extremely frugally, we never seem to get on top of everything. We have now reached the point where we can't meet the minimums on some of them and it's making us sick with worry. The stress is awful and we are barely existing rather than living. We have 2 teens who know our situation and are amazingly supportive and brilliant about it all. We both have good jobs and lots of equity in the house so are seriously considering selling up, paying it all off and starting again in a smaller house, with no debt. This is not a decision taken lightly - been thinking about it for ages but never had the courage to face our family and tell them why we want to downsize. Please realise that we will NEVER got into a situation like this again- We will not have another credit card ever again. But this way we stay on the property ladder, can start to SAVE for the first time in our lives, and get rid of the awful stress cloud which is constantly over us. I know you lovely people on here will have valuable advice and I seek your help. Thank you in advance for listening, and hopefully not judging us.

worried_jim

Don't! Contact Payplan or Step Change first so they can go through you options with you. There is no need to think this through on your own- get some free support/advice. Good luck!

HampshireH

Geegeejune have a look on the debt free forum. Lots of people happy to help with cutting costs etc to clear debts.

steampowered

You could consider remortgaging, if you are able to borrow more than your current mortgage? The extra would come back to you in cash, be used to pay your debts, and would be paid off as part of your mortgage over a longer period at a lower interest rate.

tlc678910

If you can find a suitable house that you like and it meets the needs of your family I wouldn't stay where you are because of what other people think. None of their business really (even family). You don't have to mention debt - just tell them you are downsizing to have a smaller mortgage and ease off from the rat race a little and spend time with the kids before they are flying the nest. Doesn't matter if it's not wholly true and you continue working the same - it will have been forgotten by then.

p.s. I love the house we live in. It cost £140k 4 years ago which in this area is cheaper end for a 3 bed. I often look at right move and think how I prefer our house to many of the much more expensive houses. It has a bigger garden and more space around it and parking than many new builds that cost more than twice the price. (Edit: my point being you might find a cheaper house you really like or has great potential) You could even buy a (cosmetic) fixer upper and have fun with that. Just make sure you can live in it as it is and do work as you go along and not by getting into debt.

I think your fresh start could be quite exciting and not necessarily negative but if you don't feel that way and are going to feel that you lost your dream house through debt etc then don't do it and seek debt solution advice as suggested above.
Good luck

Pixie5740

Selling your house and downsizing won't help if you can't budget your money properly. You will just end up in the same position again like you did with consolidating.

There are ways of dealing with unaffordable unsecured debt so contact Step Change, National Debtline or CAP UK for advice.

Doozergirl

I would seriously look at the Debt Free Wannabe forum and the solutions people have used and also just how positive they feel once they get into the position of dealing with the debt head on.

Talking to the likes of Step Change and taking proper advice is imperative before you make a drastic decision like downsizing. It's quite possible that you can stay where you are and start to pay off the debt properly.

Even moving house costs money. It isn't an easy option, it takes time that you may not feel that you have and if it leaves you struggling for space, it isn't great.

You're not the first, you won't be the last.

AnotherJoe

Credit cards weren't the problem. Spending beyond your means was. Hopefully that will change.
What happened when you consolidated ? Some people here are saying put it on the mortgage but that's just more consolidation which didnt fix the problem before so if you do downsize make sure you have realistic budgets and an understanding of your income and outgoings.

geegeejune

Thank you, that is exactly what we are hoping to do! We have never liked this house much and bought it 11 years ago in a hurry as it was in the right catchment area. It's in an expensive area so has gained value enormously. We are having a valuation tomorrow with a view to putting it on the market asap. Looking forward to an exciting change and a life less fraught with worry.

Slithery

geegeejune wrote: »

We have consolidated several times .... Please realise that we will NEVER got into a situation like this again

Past experience says otherwise...

westernpromise

Depending on where you are buying stamp duty could cost you significantly.