If you are deeply in debt and feel like you are drowning, if credit card interest rates are not allowing you to pay off the debt, then you must consider your options. The first option to consider is to sell a major asset. Selling a major asset like your house or your car may allow you to raise needed cash while keeping associated costs to a minimum. This option is a good idea if you have a reasonable amount of equity in the house or car, perhaps from appreciation over time, and, if you sell, you will be able to raise cash. If you are being pressured by threats of foreclosure or repossession, you will almost always do better by selling the asset yourself than waiting to get cash back after the foreclosure or repossession.
Of course, with the proceeds of the sale you must first pay off what is owed on the asset as well as any secured creditor, say a holder of a second mortgage, as well. But wait, before you see any proceeds you will have to satisfy any liens filed against the property by creditors. In short, you must satisfy all secured debt against the property or asset before you receive any proceeds from the sale. You may then use any proceeds from the sale to help you pay any other debts that you have outstanding.
Hold on a moment, before you actually write a check to any unsecured creditor, make certain that if you have sold a house that you make adequate housing arrangements–you do not want to wind up homeless. If you have sold a car, make certain that you have made arrangements for transportation to and from work–not having a car may cause you to lose your job and therefore your ability to pay off debts.
Before you sell a house or car, you must carefully consider your options. In the housing market today, where houses are beginning to lose some appreciated value, you may want to consider not selling just yet. Waiting six, nine or twelve months may allow your home to recover value and being worth more when you go to sell. If you sell too soon you will be giving up an asset that will deprive you of the ability to make more money by waiting. Selling too soon may have the effect of locking you out of the housing market once you do get your head above water.
By carefully considering the value of your home, the amount of pressure you are currently feeling to feed the wolves may be placed in perspective. Selling may be an option, but it may not be your best option. In short, take no action impulsively. Think through the benefits tor taking an action as well as the potential adverse impact that your action may have on your future financial security. Do not act in haste but consider all of your options before you take any action. This will protect you from making an irreversible mistake.
Copyright © 2007 Roger Passman All Rights Reserved
Roger Passman is the President of WDC Financial Services, Inc. His firm works with clients to restore damaged credit, negotiate payment plans, and reduce debt. You can visit WDC Financial Services at http://www.wdcfinancialservices.com
WDC Financial Services also maintains a blog filled with information about managing financial obligations and more at http://wdcfinancialservices.com/wordpress
Tags: credit repair, debt relief, restoration
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