How to pay debts? always broke..

A

Always_Broke

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Always seem to be playing catch up every month and we are living in our overdrafts. Just wondering if anyone can advise on the following.

Married & 2 children.

1 house in Dublin that we live in, 1 house in Wexford, bought in boom, worth half of what I paid. Is now rented out. The rent in Wex doesn't cover the mortgage so we have to add €350 each month.

Credit Card Debt : 2 different cards, one BOI (€4200 owed) and one Avant card (€2000)

My question basically is should we go interest only on the Wexford house to try to pay off credit cards or is that not a good idea? Or any other suggestions as to how to get out of this debt. We have no savings. Am tired of always being broke and playing catch up and never getting on top of things.
 
Credit card rates are generally ridiculously high do your best to get rid of those first. I assume your CC rate is about 3 times your mortgage interest rate. I imagine your not paying tax on your rental property if the rental income is falling that short of the mortgage repayment. If you go interest only you absolutely need to use all of that extra income to pay off your cards, it would be very easy for it to be absorbed into your day to day living. When your CC debt is gone revert back to your original repayment or start saving it.
 
"I imagine your not paying tax on your rental property if the rental income is falling that short of the mortgage repayment"

Why would you assume that Dublin78, rental income is still classed as income even if the mortgage is greater, only 75% of the mortgage interest - not the full mortgage payment - is allowable

OP, I can't imagine your bank would be happy with you not paying the full mortgage so you can pay unsecured debt, I agree it might be a good option for you but it's not for them.
Have you looked at other ways, perhaps getting a loan at a lower rate and obviously getting rid of the cards? We did that this year and although it felt like losing a security blanket initially having no CC, it's great as it forces us to keep on top of everything.
Still have the millstone of a rental property (former home failed to sell) around our necks but it gives a little boost every time I think at least there's no CC bill arriving!
 
Hippy1975, I'd love that. No credit card bills. We're just paying the min each month, €40 on one and €105 on the other and its not bringing the balance down at all. I wonder if we could get a credit union loan to pay it off. I've a good credit history with them but I know they're very strict at the moment. I'm not working and husbands salary would be the basis. Is it 4 times what you have in shares that you can get? Its crazy. I was always good with money and had no debts but with the wex house and two kids that has changed!
 
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