Debt is a common modern problem. Whether it’s credit cards, student loans, or medical bills, debt can cripple even the most financially stable individual. For some people, selling their home to pay off their debt may seem like a good option.
But this isn’t a decision that should be made lightly. Should you sell your home to deal with your debt? Here’s what you should know.
Consider the Reasons for Your Debt
The first thought when it comes to getting out of debt is to sell your assets, particularly your home. However, it is essential to evaluate if this will solve your financial problems forever.
If the reason for your debt is excessive spending, then selling your home will not likely fix the necessary spending habits that got you into the debt dilemma. You need to plan for your financial future and identify the root cause of your debt to avoid falling back into the same situation and needing to do this again in the future.
Explore Your Options
Before deciding to sell your home, consider all your options.
Some viable alternatives may help you avoid selling your house, such as refinancing your mortgage or taking out a debt consolidation loan. Debt counseling is also a great option that allows you to work with a professional who can help you come up with a viable solution.
The goal of these other options is to keep you from making a quick, emotionally charged choice that may not be in your best interest.
Assess the Market
If you seriously decide that selling your home is the best method to get out of debt, be sure to assess the housing market’s readiness. You don’t want to sell your house only to find out that you did not get the best possible price. You can accomplish this by examining the latest housing marketplace trends, talking to real estate agents, and getting a professional home appraisal.
Consider the Tax Implications
Before you sell your house, make sure you understand how the process will affect your taxes. If you have owned the property for a certain amount of time, then you may be entitled to capital gains exemptions that can save you a significant amount of money when it comes to taxes.
Selling your home can be a good option for homeowners who are under financial strain. However, this decision requires careful consideration and planning. It’s vital to seek counsel from a financial advisor or debt counselor on the best decision to make when it comes to planning your financial future.
If you choose not to sell and file for bankruptcy instead, it may be possible to protect your home. For more information, contact the Law Offices of Robert M. Geller at 813-254-5696 to schedule a free consultation with an experienced attorney.