I am in the process of debt management for a relatively large amount of debt and still have a couple of years to complete the payoff. I am about to receive an inheritance larger than the debt. I can either have cash or real estate. Which would be the smartest to do?

RickJ

I about jumped to say take the real estate...but to best decide, we should first answer:

1. what is the value of the real estate?
2. what is the average appreciation rate per year for real estate in the area where it is? (If you don't know this, what city is it in?...or better yet, what city and zip code if in the US),
3. what is the balance of your debt?, and finally,
4. if you are paying any interest on the debt, what is the amount and rate?

Dunnica

Thanks for responding- I really don't know what to do. The value of the homestead is roughly $110,000. My total credit card debt is $33,000. Approximately $22,000 of it has been charged off as bad debt, leaving me the balance in debt settlement. As you may know, debt settlement negotiates payoffs with each creditor and I pay a monthly amount to the debt management company. Sooo, the interest still accrues but I should be able to settle for half of the amount, over time.

The home is in zip code 77901.

RickJ

With that difference (110k for the property and 33k in debt) I'd go with the real estate hands down.

(And btw average appreciation of single family homes in Victoria, TX is about
7.8% per year; above the national average.)

Dunnica

I think that you are absolutely correct. But I am not in a financial position to keep the property up, utilities, taxes, etc. Well, maybe, but it would be a real stretch. The cash would give me a fresh start. My concern is that receiving the cash might disrupt my debt settlement and keeping the house might keep them off my back. Any thoughts on this angle?

RickJ

I feel like a knucklehead for not asking before : What is the amount of the cash option?

Dunnica

Sorry, been away for a few days- My share of the inheritance will be roughly $100,000.