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What Do You Think About Us Selling Our House And Paying Off Part of Our Credit Cards? – Susan

“Dear Steve,

My husband is 51 and I am 59. My goal is to retire at 62. We have a 1st & 2nd Morgage. Also, over 100,000 in credit card debt. We are living week to week to make all payments. We have an offer on our house. The offer would pay off the mortgages and about $45,000 of our credit card debt. There is no way we could pay off the credit cards by the time I want to retire. We are willing to rent at this time and we would be able to pay off the balance of credit cards in about 3 years as long as I work till I am 62. We have no problem renting because we may move to another state in the future.

What do you think of us selling our house and paying off the mortgages and partial debt?? Please advise.


Dear Susan,

You know, this is one of those rare times when you might want to consider a debt settlement approach with your proceeds from the sale. The bad thing about debt settlement is that it will result in bad credit and a potential tax liability but the good thing is that you would be able to settle a majority of your credit card debt with $45K. Not all creditors might agree but for those that don’t, you can just keep making payments.

So why will this result in bad credit? Two reasons. First, the amount of debt that is forgiven by the creditor will show on your credit report as a bad debt that was written off. The second reason is that to get to the best settlement offers you will need to go 90 days or more past due to get them. Silly as it sounds, that’s just the way it is.

The advantage of settling the debts is that it could significantly eliminate most of your debt and with the remaining time you would have a much better chance of paying off the rest.

See also  Is This Really Going to Be My Tax Liability When I Settle My Debt? - Joe

Now, I strongly suggest that you shop carefully for a debt settlement company, you can start with this link. Make sure you find one that would not charge you up-front fees. If you need some help screening them after you talk to a few, contact me below and I’ll guide you through the process.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • Thank You for your advise it was very helpful. I was glad to hear you didn’t talk me out of selling my house. I do not want bad credit showing up on my credit report since it is perfect and if I use debt settlement it will not be.I would rather pay off what I can and pay down my other charges as much as I can. If in the future we decide to rent elsewhere or decide to buy again I do not want any problems with my credit history.

    • Susan,

      That sounds like a logical approach. Just make sure that you keep some of the cash in an emergency fund or savings account so you’ve got some cash around for a surprise expense and it doesn’t have to land on the cards again.


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