You may want to sell your assets to pay off debt if you are starting to have difficulty paying for your monthly bills with your net income. Even though this option doesn’t address the main cause of your debt problems it offers a relatively quick, temporary help before you can no longer control your debts.
Let’s say you are now being chased by a lot of creditors and you are brave enough to discuss your situation with your creditors. How can you negotiate a more manageable payment scheme if you don’t have sources of immediate funds for making the payments? If you have some assets that are available for selling then you’ll be in a better bargaining position.
What To Do Before You Sell Your Assets
Selling assets are a temporary solution. Before you sell your assets look closely at your spending pattern. Where does your money usually go to? If about 25% of your monthly income is only enough to settle your credit card’s minimum monthly payment, you must have spent impulsively the past weeks.
Next, how much you are able to save with your level of income. If you are unable to save money at all, there could be something wrong at some point. Ideally you should have some savings for unforeseen expenses such as in cases of emergencies and illnesses. If you don’t have such money allocations you have to reconsider your lifestyle and spending habits.
Once you have created your spending budget you can list your assets and find the value of each item. You may also want to rate each item related to how easy and how fast it will be sold. Remember, just because you are desperate doesn’t mean that you would want to sell your assets cheap.
Type of Assets You Can Sell
1. Pieces of jewelry are the easiest and most satisfying to sell. As long as you maintain their aesthetic components they don’t depreciate over time. To understand the market value of your jewelries you may have them appraised by an expert.
2. Real estate properties are also considered as a good sell-off asset. It is not a good option since you may not be guaranteed of a quick sale. However, if you are in need of a considerable amount of money to settle your debt then this option is worth holding on to.
3. Shares of stocks are a good option because they are easy to sell. But you have to consider the economic condition when of selling as their value and “liquidity” may depend on that.
4. Cars and gadgets are a good option considering that selling these assets is not as complicated as selling properties. However, you may need to document the state of the item upon sale to protect you from complaints or returns in the future.
So, you could sell your assets if you want to lessen your debt quickly. By selling your valuables to repay debts you can also reduce your stress level. However, if you return to the same lifestyle that brought such level of debts in the first place, then these solutions will just be temporary.