www.iva.co.uk

Hi guys, I have a little dilemma. I currently have a mortgage on a shared ownership. I owe £48k on my 50/50 mortgage but have just recently had my share valued at £27500 which means that I'm now 22k negative equity. What do I do? A) ride the storm and rent it out or b) walk away and go bankrupt. I have to go into rented accommodation due to us having 2 young children and in need of a bigger home.

Hi Lee, I'm afraid for me it's too big a decision for us to advise you on a forum just like that when we have no idea about your personal circumstances.

For me with that level of negative equity I would be looking at BR or an IVA to deal with it, but I wouldn't like to advise you to do that without taking some professional advice about how these debt solutions will affect your future should you decide to take that path

I agree with Lem, but would also add re. your option A) -- as part owners you are unlikley to get permission to rent the property out.

I have already had permission from both the housing association an the mortgage lender due to our family circumstances (4 living in a 2 bed flat). If I do rent out I would have to put approx £170 of my own money towards the rent due to the fall in house rental prices etc. I just feel that I am paying into a loss and in the long run it will just get worse. i would rather get out now and suffer the strain for 6 years and then start a fresh and be happy. I have already completed an IVA via a F&F settlement so I sort of know what to expect going forward. I will prob just see how the rent goes and if I feel that I am not getting anywhere I may look towards BR

Property is still a good long-term investment but shouldn't be looked at as something to generate a monthy profit. If the property isn't costing you anything it may be worth hanging onto it for when property prices rise.

It's a tricky one because as I only own 50% the terms of the contract only allows me to rent it on a 12 month rolling contract. I will see how my financial status is like once I move and rent out my place. If I feel strained, stuck and depressed then I will apply for br and enjoy my new rented home as life is far to short to worry x

Sounds like you are doing the best thing by giving it a go and seeing how you mangage. Do make sure you are budgetting correctly though so you can understand what your time affordability is over the year so you end up making the best economical decision long term.

Keep us posted and good luck with the move!

Thanks Tina, as I was once in a iva, I realise how important budgeting is ( I could probably do George Osbornes job blind folded ha ha) so I know not to take drastic action unless its critical to my family's finances. It's my family which comes first, debt comes and goes x

If you had the debt at the time of the IVA you should speak to your IP as any shortfall could be bound even though the IVA has completed. You may need to take legal advice but you may not have to go through bankruptcy or an IVA again.

Glad to hear it Lee!

Michael peoples, I'm intrigued as to what your saying, how would it work? Do you have a contact which I could speak to you in more detail please?

Michael's details can be found under the 'Ask a Question' link on the left hand side of the page but of course he cannot comment on individual circumstances if he does work for your IP company.