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Original poster

Would you sell house to pay off debts?

26 replies

OscarandTimmy · 03/04/2014 16:16

Partner is in around £12,000 worth of debt including £4000 with the tax man (he is self employed). I am a SAHM and he earns around £500 a week from his business. I also get £120 a week from an inheritance fund. He is terrible with money, although this comes from his dyslexia - being unable to keep up with paperwork.

I absolutely HATE the house we are living in and have never been happy here. It's getting to the point where it gets me down. I would love somewhere with a garden. We live in central Blackpool at the moment and it is awful.

I am due to go to uni in 2015 and will be a qualified social worker in 2018. I would love to sell the house, use £10,000 to pay off his debts to start afresh, and put the remainder (around £20,000) in a savings account for a deposit on a new house once I am qualified and we have two incomes.

Good idea or not? I personally think its a good idea but I think that is partly because I am so unhappy here.

OP posts:
Original poster
OscarandTimmy · 03/04/2014 16:19

I must add, I can see now way of clearing these debts otherwise.

OP posts:
Mintyy · 03/04/2014 16:21

Can you not just downsize slightly? I really wouldn't get off the housing ladder right now. I think house prices will go up for another few years.

Original poster
OscarandTimmy · 03/04/2014 16:23

Unfortunately we can't downsize as I am expecting another child and it is tiny as it is..so we really need more room. My partner bought the house for £50,000 and it is now valued at £90,000 so we won't have lost.

OP posts:
vickibee · 03/04/2014 16:28

you may have enough equity to borrow an additional 12K to pay the debts? LTV would be 66%. I would prob explore this option first. The mortgage on £60K would be no more than renting, what about getting a lower interest rate at the same time?

Mintyy · 03/04/2014 16:31

Could you rent out the house you own and find another place to rent somewhere nicer?

When I said "downsize" I meant in terms of the mortgage but I see you already have a tiny mortgage as it is.

Original poster
OscarandTimmy · 03/04/2014 16:32

We had a financial adviser round and he said basically we cant lend anything or sell and buy elsewhere due to my partners books.

OP posts:
stepmooster · 03/04/2014 16:37

I don't think you can blame being terrible with money on dyslexia. I wouldn't sell up to pay off debt, interest rates are awful for savers.

Much better to look at your joint problem of not having a handle of your income/outgoings, see where your problems lie, because you can move home, rent etc but if you don't sort the root cause out, your problems will return. Get some proper debt advice.

Personally I had to give up on the sahm idea so we could have a better life, without worrying about money. But then I grew up with the fear of losing our home, no heating and little food. I remember some pretty tough times and am pretty obsessed about making sure we own a home and not at the behest of landlords.

Original poster
OscarandTimmy · 03/04/2014 16:41

I wasn't blaming his money skills on dyslexia but the fact he hardly ever opens his post as he can't really read it! He didn't go to mainstream school as he has it so severely. So things like this mean that he missed payments etc before I met him. Now he has me to read through things, it's fine but we are just trying to get a handle on the damage that has already been done. That is the root problem.

OP posts:
Original poster
OscarandTimmy · 03/04/2014 16:43

The SAHM is not something I'm happy with either, but with two children and no qualifications - childcare is just too expensive. That's why I am due to go to university - I don't want to be a SAHM, but I don't want to be working to pay for childcare either.

OP posts:
AntoinetteCosway · 03/04/2014 17:08

£12k in debts should be fairly easily dealt with on your combined salaries-if you budget well and snowball you could clear them in a couple of years, let the house grow in value (hopefully!), then turn your debt snowball into regular savings for another year or so and have a nice big deposit for your next house.

crashbangboom · 03/04/2014 17:20

You'll need full time childcare for the SW degree too. Childcare grant not likely to be full if partner is on 26k a year.

Original poster
OscarandTimmy · 03/04/2014 17:22

I have already got my finance sorted and got the childcare grant

OP posts:
crashbangboom · 03/04/2014 17:27

For a Sept 2015 start? How?

Chatelaine123 · 03/04/2014 17:52

What crashbangboom
askes, how have you already secured finance and childcare grant?

Original poster
OscarandTimmy · 03/04/2014 18:39

I was meant to go this year but found out I was pregnant, so have had to defer to 2015. I had already sent off my finance and got it back before I found out. I rang them to cancel, and they said providing our income stayed the same (which I don't see increasing) I would be likely to get the same outcome.

My apologies, I have not already got it, but is likely to remain the same.

OP posts:
snozzlemaid · 03/04/2014 18:43

I'm confused. You sell house for £90k. Pay off £10k debts and put £20k in savings.
Where's the rest going?

crashbangboom · 03/04/2014 18:46

So they've confirmed childcare costs for a baby not yet born. Seriously OP big pinch of salt with everything student finance say.

Vickiyumyum · 03/04/2014 18:53

God yes don't believe what student finance say until the cash is in the bank!

I know a couple of people who this option has worked for. They both had large debts. One because a business went bust and the other she built up large credit debts when severely depressed.

Renting can work and be beneficial as long as you are a good tenant and find a good landlord. I'm now in rented due to a divorce but it works for me as it means I don't have to worry about large repair bills for the boiler etc.

AntoinetteCosway · 03/04/2014 19:00

snozzle paying off the mortgage?

Thetimes123 · 03/04/2014 19:05

I think someone has already said it but 12000 isn't too much to deal with, stay put till you qualify, pay off the debt then move to a nice place with garden.
Can you not take command of the helm and be your husband's accountant and really get things ship shape?
Or be really brave sell up buy a caravan put money in off shore accounts and then go on housing list, am not being flippant at all, there are ways to work the system.
Good luck xx

QuiteQuietly · 03/04/2014 20:06

My concern with selling would be the £20k sitting around. Firstly it's likely to impact on benefits/grants etc. Secondly, and perhaps more seriously, if your partner is rubbish with finances and continues to run up debt after the house sale, then the savings lump could be at risk of being frittered away on the next lot of debt. Unless your current debt was incurred by some major and unforseen drama (roof collapsed, hospitalisation abroad etc. etc.), then it could be the sort of casual drip-drip-drip debt that just keeps incurring.

Original poster
OscarandTimmy · 04/04/2014 09:02

Firstly, my partner's debts were caused by him not opening his post, missing payments, signing up for direct debits he had no idea about - this is due to him being severely dyslexic (he did not go to a mainstream school and can barely read or write so the jargon/words on bills and such confuse him - not an excuse but an explanation).
It is not because he fritters money away. This is all from before I met him - I now open and file his post, reminding him of payments etc, and am trying to fix the damage already done.

Secondly - the student finance have not calculated money for a child that is not born yet - I have a one year old and the award was based on him. Surely with two children, it would only be higher? Or at least the same?

Thirdly - we only have around £30,000 equity in the house....hence why we would only get this amount from a sale.

OP posts:
Original poster
OscarandTimmy · 04/04/2014 09:03

And all my classmates went to university last year as I was doing the access course part time as opposed to full time... and they all received the money stated on their student finance award.

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Chatelaine123 · 04/04/2014 18:08

When your dp next does his tax return, make sure he claims for your time/admin.

Moreisnnogedag · 04/04/2014 18:55

I wouldn't sell but would knuckle down, pick the debt with the biggest interest rate and pay off while discussing with the others about payment freezes/lowest repayments.