Sell and rent to get rid of debt?

Shelldean

Stubod said:

Emmia said:

Stubod said:

I would definately NOT sell and rent.....renting is dead money. You earn more than enough to sort your debt out. You must be able to consolidate your debts, and get a loan with a lower interest rate??? 

If necessary get help from somebody to manage your income / expenditure / debt management!!

But DON'T RENT!!!!

Consolidation is a terrible idea, and can quickly lead to debts doubling if all the cards aren't closed and the reason(s) the debt arose aren't dealt with. 

OP do you know where the money has gone?

You may wish to pop over to Debt Free Wannabe for advice on how to tackle your debts without selling your home.

....I was suggesting consolidating only if the OP could get a lower interest rate???...pretty obvious (at least to me), not to do so if the rate is higher.....

Stubod 
I think what Emma was trying to say was sometimes with a consolidation , although the consolidation loan is at lower rate of interest. People can be tempted to use the credit card again and run up another debt. Meaning they have to pay the consolidation loan plus the credit card debt. Therefore they've doubled their debt.

Op needs to address what caused the debt in the first place. 
I had debt so got a consolidation loan to clear it with lower interest. Used the cards again 
Bigger consolidation loan. Rinse and repeat.
I started with a small loan of 2k ended up with a 25k loan before I sorted my head out and didn't respend on the cards.

No point in a consolidation loan if you're going to run the debt up again 

QrizB

Shelldean said:

Op needs to address what caused the debt in the first place.

Agreed. They've got a good income (roughly double the average) and seems to have low outgoings. They need to deal with whatever caused the debt in the first place and prevent it coming back. Once that's done, clearing it should be straightforward.

Emmia

Stubod said:

Emmia said:

Stubod said:

I would definately NOT sell and rent.....renting is dead money. You earn more than enough to sort your debt out. You must be able to consolidate your debts, and get a loan with a lower interest rate??? 

If necessary get help from somebody to manage your income / expenditure / debt management!!

But DON'T RENT!!!!

Consolidation is a terrible idea, and can quickly lead to debts doubling if all the cards aren't closed and the reason(s) the debt arose aren't dealt with. 

OP do you know where the money has gone?

You may wish to pop over to Debt Free Wannabe for advice on how to tackle your debts without selling your home.

....I was suggesting consolidating only if the OP could get a lower interest rate???...pretty obvious (at least to me), not to do so if the rate is higher.....

Consolidation is almost always a bad idea unless the person consolidating also shuts the cards/loans (and does not reopen... They also cannot leave an open card for "emergencies")

The problem with consolidation is that cards get "paid off" with a loan with lower monthly payments and interest... But the reasons for debt are not addressed.

Plus with a "manageable" monthly loan payment the credit cards carry on being used - and the debt quickly doubles. 

DFW and a SOA is a better starting point.

fatbelly

Madsfluffy12 said:

Currently have significant debt that is accruing 20%+ interest. I have a property that has equity that significantly exceeds debt. I can’t get 0% cards. Am I better off selling, paying off debt and renting? Then keep the equity remaining to put into future property?

No. Terrible idea

There are other ideas nearly as bad in this thread

You are probably best going for a debt management plan

See you over on dfw on a new thread

ReadySteadyPop

Stubod said:

I would definately NOT sell and rent.....renting is dead money. You earn more than enough to sort your debt out. You must be able to consolidate your debts, and get a loan with a lower interest rate??? 

If necessary get help from somebody to manage your income / expenditure / debt management!!

But DON'T RENT!!!!

Debt at 20% is much more dead money than renting in my experience, and overpaying for a house and getting caught out with mortgage rate rises would be even worse, the OP needs to tread carefully.

ReadySteadyPop

Madsfluffy12 said:

Currently have significant debt that is accruing 20%+ interest. I have a property that has equity that significantly exceeds debt. I can’t get 0% cards. Am I better off selling, paying off debt and renting? Then keep the equity remaining to put into future property?

You get the 0% card by paying the credit card balance in full every month, I have done this for many years and would recommend it as a goal for financial peace of mind.

Herzlos

fatbelly said:

Madsfluffy12 said:

Currently have significant debt that is accruing 20%+ interest. I have a property that has equity that significantly exceeds debt. I can’t get 0% cards. Am I better off selling, paying off debt and renting? Then keep the equity remaining to put into future property?

No. Terrible idea

There are other ideas nearly as bad in this thread

You are probably best going for a debt management plan

See you over on dfw on a new thread

Consolidation is a bad idea, but it seems like a much worse idea than selling a home and renting. That'll hurt their stability a lot more than adding some secured mortgage debt and drvive their costs way up.

That said they'd definitely need to be really careful and disciplined going forward to actually solve the problems. 

MEM62

Madsfluffy12 said:

Am I better off selling, paying off debt and renting? 

Only as an absolute last act of desperation.  

Madsfluffy12 said:

Income £72k, debt £55k, mortgage £230k, equity £170k. Current outgoings approx £2k per mth 

I appreciate that the interest rates are high but I am struggling to understand why someone with a £75K income cannot service £55K of debt.  

You need to post an SoA on the Debt Free Wannabe boards for advice.  

Maahes

I sold a house to pay off £50k debt and it took me 20 years to be able to buy again, though with a lower income than you. Long term it was a very poor decision, not least because I lived in London and the house I sold for £205k in 2001 is now worth over 900k 

ReadySteadyPop

Madsfluffy12 said:

Currently have significant debt that is accruing 20%+ interest. I have a property that has equity that significantly exceeds debt. I can’t get 0% cards. Am I better off selling, paying off debt and renting? Then keep the equity remaining to put into future property?

Could you stay in the property and take in lodgers to help out?