Moving abroad - please help!

MartynS13

Hi everyone. I’m a regular reader on here but this is my first post. If anyone can offer any sound advice I’d be very grateful.
I’ve been offered a job in Spain on a permanent contract and am moving in January. My wife and 2 year-old daughter will have to stay behind for a few months as we can’t afford to lose her wages while we’re making the transition. She is a teacher so she will be finishing the academic year and will then be going on maternity leave.
The problem we have is twofold. We have debts of around 25K (bank loan – 11K, professional studies loan – 4.5K and credit card – 10K) and a mortgage which is coming to the end of its home start period which means we are about to start paying capital. We are just about managing to stay afloat on our current wages but the move will mean a slight drop due to the Euro exchange rate. We have to take this opportunity because my wife is Spanish and it’s her long-standing ambition to return there. Opportunities like this really are few and far between.
We can’t afford to keep the house but we also can’t sell it. House prices are dropping and we have a shared equity property so we would have to pay a third back to the council. If we sell for any less than a 9k profit we would lose money. My wife doesn’t want to move at all while she’s here as she is pregnant and has to look after the 2 year-old. She would prefer not to disrupt her environment.
Then of course, we have the debts to pay off. At the moment we have 0% on the credit card due to recent balance transfers but that will end in May. Some of it is a cash debt so there is a smallish monthly payment. There is also about £350 going out on the loans.
If we don’t sell the house I can see the situation getting rapidly out of control. I realise we will have to bite the bullet in some cases but I’m not sure where. Does your credit rating transfer to other EU countries? Maybe if we tried to write off some debts, would this affect our ability to buy in Spain? I’m thinking of trying to negotiate a reduction but I’m not sure how this would affect our credit abroad.
I’m quite confused as there’s so much to think about. I’d appreciate any help.
Thanks, Martyn.

BlondeHeadOn

Hi Matryn,

Can I suggest you re-post this in the Debt Free Wannabe board? Or if one of the moderators could move it there? I think you will have far more replies on that forum, as there are some great people there who would be able to help.

hartcjhart

AFAIK, your credit rating is not affected in Spain,as debt is handled slightly differently there,when you go for a mortgage they do not credit score you as such,they like to see wage slips and preferably a P60,and thats that,

Credit cards are harder to get and again work in a different way,

But with a job on a permanent contract things will be easier for you

sandy2_2

BUT salaries are a lot lower in Spain than in UK, so that might affect how you can service your UK debts

missile

You have difficult choices to make. On the good news side house prices are generally lower (for an equivalent UK location), interest rates on morgage and loans are lower and your wife (and hopefuly you?) speaks spanish !

Not sure about your logic on retaining UK property. Presumably shared ownership is based on current value and whenever you sell you need to pay back 1/3rd? I don't think you should speculate on house prices and if you have no need for UK address you would be better to sell and reduce your debts / outgoings.

geordie_joe

Could you rent out your UK property when you move?