I saw this on the MSE forums:
To cut a long story short our main problem is being unable to sell the house we own that we don't even live in! Been on the market 2 years, when I found out was going to have to move. In negative equity now by a long way. If we manage to get a sale at the current price it is being marketed we will have a shortfall of £40K. If it went to auction looking at £100K shortfall. Been just about keeping up with mortgage payments of £2250 per month with a few gaps, hence arrears of £7900.
After some persistence managed to arrange token payments of £1 per month for all the unsecured debts - this has been for 12 months now.
What should we do with the house? We will never live in it again and feel aggrieved about continuing to pay out for it when we're never going to live there again. Have rented it out for 12 of the last 24 months to keep things ticking over a bit. Cannot afford any mortgage payments now that we're not receiving any rental income as tenants moved out. Before then just about breaking even. Had a couple of viewings but no offers. Market in that area is dead. Considering voluntary repossession but not sure where that will leave us. Mortgage is in joint names - all other debts are only mine.
If I had no debts and we weren't paying the mortgage we'd have £1300 per month surplus. If we got rid of the house at least we could comfortably sort out some sort of repayment plan. We're resigned to the fact that we'll be renting for some considerable length of time as credit rating now gone from excellent to something resembling Greece's credit rating. May also have the option of a family member taking out a loan of £25K to consider a F&F on the unsecured debts and I would pay them back every month, but obviously not an option while we're still making ridiculous mortgage payments. Mortgage company are doing everything they can to get their money from us and not showing any sympathy at all.
Damn the crash in the housing market. If we'd sold straight away at asking price the equity would have paid off all the unsecured debts. Can't believe how badly things have turned in that area.
Sorry for the long post.