DESPERATE for advice...

DIBBer_2

Hello, first post and would welcome some opinions please.

Currently we have managable debt but no quality of life.

Between me and my husband, various credit cards and an un-secured loan (2 years left to pay) we owe £48,500.

Our mortgage is £90k and our house (in the current market) is worth £150k (getting valuation tomorrow to confirm)

Which option would you go for?

1. To carry on and struggle through to keep on the property ladder?

2. Sell the house, be COMPLETELY debt free, RENT for LESS than we were paying on a mortgage allowing us to save £500+ a MONTH, save up for a deposit and in a few years try and get back on the property ladder.

We are both 40. I am self employed and whilst my business is fine, we are unable to secure a £50K consolodation loan.

We have also looked into each getting a personla loan for half of the debt - however having spoken to National debt helpline they say to consolodate un-secured loans INTO a secured loan is NOT the way to go. They did recommend a debt management plan BUT for me to do this I have to supply details of my business - and, whilst i am self employed - its also a partnership and thats simply a no no as this is MY 'mess'.

Would option 2 be so bad? To be DEBT free, wipe the slate clean and start over?

Thoughts would be welcomed please x

lilian1977

Firstly, hello and welcome! There will be other people along who know more about this kind of thing but I thought I'd say a few words anyway!

In my opinion, I don't think selling right now is the best thing to do - you only have 2 years left on the loan and who knows where the property market will be then? Post up your SOA so we can have a look and see where you can make savings.

trying-very-trying

I'm sure if you post up a full soa the great and good of this forum will soon come along and give advise on how to cut back and what your options are.
They really are a great bunch on this forum, and I picked up a lot of good advice last year when I started down this path.

Cleosmum

Great news about not getting the consolidation loan, not a good way to go!

I would be tempted to do number 2, but you need to clear everything and make sure you dont run up the cards or get any more loans, or you will find yourself in the same situation further down the road. You could maybe think up a plan 3? Hit the debts head on, cut down as much as possible, get the cards and loan paid off and get them cut up, you get to attack the debt head on, keep the house and not have to deal with the upheaval of moving umpteen times in the next few years. You also get to feel the pinch that will make you vow never to get into any kind of debt again lol

I would do up an accurate statement of affairs and see where you can cut right back, you could also post it up here and the lovely people here will go over it and offer their suggestions. There is a good SOA calc at makesenseofcards.com

churchrat

hi
I think it depends on whether or not you can sell your home for enough to pay all the debts. I don't know where you live but selling can now take avery long time, and the buyer is ina very strong position to command a lower price than you may feel is fair. If you have children have you thought about moving them from schools etc??

I think I would try the dmp route, if it does not work you could still sell. If you sell first you will never know if you could have saved your home.

There is no reason why you cannot manage your own dmp--we do-- but it is harder to set up and you have to be very focussed and determined. I think the number 1 option is appealing because it gets rid of your problem "quickly" but in reality you would be feeling the effects for a very long time.
goodluck with whatever you decide

andan

Hiya and welcome to the boards. I personally would go with option number 1 and try and set up a proper dmp plan. Also get your SOA up to see where there may be opportunities to cut back, fresh set of eyes may do wonders. The reason i would not go for option 2 is like churchrat said, you may not be able to sell your house right now, plus its something secure over your head and renting is dead money.

mrsbez_2

Hi, i think if you can post a statement of affairs then it will help to see how you could save money to make life a little easier.
I think the best option is to look at your debts and your spending. If you can't see exactly what you have spent this £48,000 on then you have to take a very big look at your spending. A good idea is to keep a spending diary, or go to www.spendingdiary.com, you can then see exactly where your money is going and be able to cut back.
Even if you went for the option of selling the house, you may still be in a position where you cannot save any money, if you are still spending at the same rate.
Do you have any other assets that you could sell??

NUFCnutter

Just from what I have heard Martin say I wouldn't go for the personal loan option. I am trying to work to a DMP at the moment and it is hard to do but its worth it. The other guys have posted some great advice up. Hope it helps you.