Jan 28, 2010

To Sell or Not to Sell?

That's the question we've been batting about lately.

We bought our house 10 years ago. House prices were just beginning to rise and we were able to get this at a VERY decent price. That means that it's value has risen about 70% (woo hoo!).

When we moved into this house, we were in our mid-30s and had never been in debt (except for a small student loan that we paid off as fast as possible, making minimum wage!). We'd ALWAYS paid all of our bills on time, drove used (sometimes dilapidated) vehicles, pinched pennies, worked multiple jobs, etc., etc. Then we bought our house. We had a down payment and everything. It was our only debt.

In the last 8 years, though, we've had interesting things come up. We had between 2 and 12 employees for a couple of years. That experience was so expensive that there were many, many weeks where we paid them, bought the supplies for the customer, and had zero take-home pay.

We had a baby, but he didn't cost too much. I guess we'll keep him.

Then, there were two trips south to visit previously mentioned MIL that racked up several thousand in expenses. There were other little things, but the latest financial setback was last winter when my husband had almost NO income for 4 months. Yet, we still had to pay the bills.

That 8 years of "interesting" events resulted in credit card debt that is so high I'm too embarrassed to type the number!

We are SO VERY TIRED of being in debt. Really, it's being in slavery. Frugal is one thing. I'm happy to be frugal and make our dollars stretch. What I'm tired of is paying the card companies for YEARS making my dollar stretching only a futile effort in scratching the surface.

That's the background. Tomorrow I'll post what our "Plan A" possibility is. I'll also post the pros and cons, because it's not as clear-cut a decision as one might think it should be.

I'd be interested in hearing anyone's experience of getting out of debt if you're willing to share. Hearing others' plans might result in a "Plan B" for us!

8 comments:

Trixie said...

Warning: this is going to be long...

Oh Roxanne, I hear you! Owing money is NOT fun by any stretch of the word. When my first husband and I divorced, we, or rather "I" had a huge amount of debt because my name was on it and he refused to pay.

We are talking more debt than I earned in salary for a year. It seemed impossible to pay off, but I got started one bite at a time. I did anything I could think of to earn extra money. I cleaned for people, prepared taxes, did budget counseling, worked at my employer's home in addition to their grocery store. One time I even stocked beer at a bar to pay my ex husband's bar tab.

I did this for about 2 years and in the 3rd year I started trading stocks and got very lucky just before the .com bubble burst. In just a few months time I was able to pay of more debt than I'd paid off in the previous 2 years from all that hard work. It was as if I won the lottery.If it wasn't for stock market gains, I would've needed a few more years to pay everything off.

I almost hate saying I was able to pay it off so quickly, because the money from trading stocks was a once in a lifetime fluke and I don't want anyone to get discouraged.

My husband and I are currently working to pay off our mortgage and we get discouraged because it seems like it is taking SO LONG. I have to be really honest with myself and accept the fact that it will take a long time.

We are back to doing what I did to pay of my ex husband's debt: everything we can think of. I put a good share of my blog revenue into paying extra on our house. I also do taxes and anything else online I can think of (because I can do it from home at anytime). Right now I am looking at doing some of those $500 or $1000 online offers that seem like scams but actually pay out. It will take a long time and a lot of work, but we will get this paid off, somehow!

My husband is self employed too, which as you know can be a major challenge. I think you mentioned your husband is a painter -- is there anyway he could expand his business into another home improvement/repair area? That would give him access to more people -- other that those that just want painting.

I pray that you and your husband will be able to find the solution that works best for you and if that's selling your home, I hope you get a fantastic price. Please hang in there and don't get discouraged!

Trixie

Rini said...

My husband and I are also in the process of paying off debt - a bit over $100,000 at the beginning of our journey. We've been at it for two years now and are down to 3 credit cards, 1 car loan, and 3 student loans. All but one student loan (the $40k one from my husband's first nightmare marriage) will be gone by the end of 2010, and that one we'll finish off a few months into 2011.

We're doing a "Dave Ramsey-ish" plan, cutting expenses and looking for extra income, while rolling the minimum payments from our finished debts into the next one. We aren't getting quite as crazy as some of his listeners (or I bet we'd be done a lot sooner), but we are doing what works for our priorities. And we're up to about $2000/mo going straight to that #1 debt on our list!

Oh, and did I mention that we're doing this while paying child support for and buying regular plane tickets for three kids who live halfway across the country?

You're not alone, not by a long stretch.

Packrat said...

Not alone at all. My husband is self-employed, also. (Notice the trend?) Debt climbed sky high. We're working on it, but with my mother's passing that has set us back again. (In this state, heirs have to pay the bills until probate is finished. It has already been 4 months of two house payments, two electric bills, etc. There will probably be another 3 to 5 months if we are lucky.) As I said before, selling our home wouldn't get us anywhere, so please be sure to weigh the options carefully.

OH, is your state a homestead state? If so, really think twice about selling your house. Just make sure you always pay your house payment and property taxes. I let you do the research for your state. :)

Roxanne said...

Trixie, Rini, and Packrat--thank you for your comments. I MUCH appreciate them. As I'm writing my next post, I'm keeping your comments where I can see them!

Roxanne said...

Trixie--Thank you for sharing your experience. That really stinks that you were stuck with the ex's bills!

Thank you for your advice. We are collecting any and all ideas and definitely appreciate your prayers.

Your blog first caught my interest BECAUSE of your abilities in this area. Your advice is fantastic! (To anyone reading this comment...go directly to Trixie's site and read, read, read!)

Roxanne said...

Rini--Thank you for sharing, too. I'm glad we're not alone in this and that others who ARE in the same boat have sound advice on how to get out of it!

The thing that makes me most mad is that we already had the mindset of no debt. We already lived within our means. Then it just mushroomed out of control.

Believe me that when we are out of debt, we will NEVER go back into debt again because of poor money management!

Roxanne said...

Rini--(Hit "enter" before I was done.) Your situation is really something! I'm so impressed that you are tackling it like you are. Do you discuss your getting-out-of-debt journey on your blog?

Packrat--I did indeed notice that "self-employed" trend. Interesting, for sure. It would *seem* that being self-employed should open up the income potential, but that doesn't seem to be the case.

Nothing like TWO households to support to really eat up those funds, though! That's pretty rough!

What is a "homestead state?" We may be, but I don't know what that is!

Packrat said...

Homestead state - I'm not sure exactly what it all means and each homestead state has different rules/laws.

In Idaho, if "you" own or are purchasing property (the main home - where you actually live) as long as "you" are current with the mortgage payments (and property taxes?) a lender cannot take the property from you. So no matter how much in debt and delinquent payments are for other things, if your house payments are current "they" can't take your house to pay other debts - even if you go into bankruptcy. I believe it is also the homestead law that also gives us about a 50 percent property tax discount.

I'm not sure what happens when one sells and moves. I know that we would lose homeowner's exemption for at least a year if we moved. I don't know how if would affect the debt protection issue.

This is worth looking into. (Your state's statutes are probably online.)

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