Should I Sell My Home to Pay off Credit Card Debt?

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If you’re dying to get out from under a heavy debt load, you may feel like you’ve tried every “trick” in the book to pay back what you owe. You may have already either considered or attempted one or many of the following:

Veitengruber Law does not recommend all of the above actions, as you can well imagine. Click on each item in the list for more information.

While we can’t tell you in this article which changes will be most successful in reducing your unique debt load, we do feel that many of the above actions are smart decisions for someone working to get out of debt.

Another effective way to put more money toward paying off your debts is to sell everything you possibly can. Any personal property you own that doesn’t have significant sentimental value can be turned into profit you can use to pay your creditors.

Should you sell your home to pay off debt?

If you have already filed for bankruptcy or if your house has been foreclosed upon, selling your home may not be a good option for you. However, we make it a rule to ‘never say never,’ so anything’s possible until your home has been sold at sheriff’s sale.

For homeowners who have such large mortgage payments that there is no money left over each month, selling is recommended. In fact, if your mortgage payment equals more than 25% of your monthly income (after taxes), you honestly can’t afford your house and should downsize ASAP.

By downsizing your home (buying a home that costs less than your current home), you’ll also be downsizing your housing budget, allowing you to put more of your paycheck toward the debts that are dragging you and your credit score down.

If you have equity in your home when it sells, you can take a portion (or all) of that windfall to put toward your debts. Even if you won’t make a profit from the sale of your home, having a less expensive mortgage payment should be incentive enough to sell your current home and buy something that won’t eat up all of your take home pay.

Selling your home is even an option if you wouldn’t be able to afford a down payment on a smaller, less expensive home. Although renting an apartment may seem like moving in the wrong direction, the money saved every month can be substantial – and it can all (or mostly) go toward eliminating your debt.

After you have successfully paid off your debts, you can then reevaluate your housing situation. You may find that you didn’t need the bigger house after all! If, however, you’ve been crammed into a small space that isn’t working for your family, you’ll be able to afford a larger housing payment without your other debts looming over you.

Talk to your local debt relief experts today about reducing your debts and whether or not selling your home is a smart option for you.

 

Image credit: Images of Money

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