Should I sell my house to pay off all my debt?

[metastache]

I’ve been a Mustachian since January, and it’s changed my life. I bike everywhere, cut my own hair, and don’t eat out or buy useless crap. However, the old me accumulated thousands of tiny enemies that the current me has to deal with. These take the form of student loans ($100k at 6.8%), and legal fees ($50k at 11%). I could chip away at these and pay them off in a handful of years (My income: $135k). Or I could sell my condo ($280k valuation, $140k equity), pay everything off immediately and start over.

Two bedroom rentals in my neighborhood go for $1,700-2,100 a month. It would drive me somewhat crazy to shell out that much cash for no return, but man would it be nice to not owe anybody anything anymore! And actually start saving more than the 10% I put into the 401k.

A move would be disruptive. There is emotional attachment to our current place. I fixed it up, and it’s home to my son. And I like it: it’s close to parks, is on a safe street, and has some character.

Should I do this? It seems to be the nuclear option, but there is real appeal in wiping the slate clean.

[Chrissy]

Your income is really high, so I don't see a reason to go nuclear on the debt.  The problem is the interest rates:  your debt is running away from you so fast, that it's hard for you to catch up.  Try to slow the debt down.  Can you refinance your student loans at a lower rate?  A lot of people have had success using SoFi.  What about a home equity loan to cover the legal fees?

Attack the debt where it will hurt the debt, not you.

[nereo]

I agree with Chrissy
For perspective, how much money are you able to throw at the debt each month?  What does your pay-down schedule look like (the month/year that you will be rid of these various debts).
The only reason I'd see to 'go nuclear' as you put it is if you could find a rental that saved you money over the long term.  Not a bad idea to keep looking to see what is out there, but with a salary of $135k/year it seems like you should be able to eliminate at least the $50k@11% debt within a few years.

[MDM]

For perspective, how much money are you able to throw at the debt each month?  What does your pay-down schedule look like (the month/year that you will be rid of these various debts).

^Good advice here.  If you haven't calculated this already, see http://www.vertex42.com/Calculators/debt-reduction-calculator.html for a decent free tool.

At 11%, paying off the legal bill is likely the best use of any money other than a higher match on your 401k contributions.

[Michread]

No, I don't think you should sell. 

You should try to live on half your income.  Do EVERYTHING to minimize your monthly bills until the debt is gone.

[Mr Dorothy Dollar]

Get a Chase Slate card with your income and good credit 20K+ @ 0% for 15 months use the balance transfer to pay down the legal. Use it to retire the rest of the legal.  HELOC if the cost and % make sense. Use cheap loans to pay off expensive loans.

[frugalecon]

Perhaps you should investigate a lower-interest rate HELOC to use to pay off a portion of the higher interest rate debt. If you are otherwise happy with where you live, the high transaction cost of selling a house might not make sense.

[deeshen13]

Paying down the debt is a guaranteed 6.8% and 11% immediately when you pay it.  Instead, you keep that money in your house equity which has a much lower expected return (inflation + a percent or two).

Refinancing at lower rates (3-4%) and using that equity to pay off the 11% in full, then some towards 6.8% seems like the easy winner to me.