If you default on a BTL property ?

[stevebullet10]

If you default on a BTL property, to the extent that is it reposessed, I assume that it is only the BTL property considered, i.e. no other assets (main residence) can be considered as equity in this scenario? I currently am in the process of trying to agree an IVA / Debt Management plan, and have several BTL's, none of which where the rent meets the mortgage, so I am subsidising them effectively, which is not helping overall cash position, wish to sell them, but a couple are in negative equity, so if I sell, I will have to pay a balance to the lender. Any advice you can give would be great. Thanks.

[Adam Davies]

Hi
Creditors owed the shortfall could look to secure a charging order on your current property or bankrupt you.
If you are looking at a IVA you could allow the properties to be repossessed and put the shortfall into the IVA,you will not be able to subsidise the shortfalls whilst paying an IVA.
Have you spoken to an insolvency practitioner about your circumstances ?
Regards

[stevebullet10]

I had a brief conversation, but was advised that as I have BTL's, an IVA would not be available to me. Is this not correct? I need to do something, quick, as I am struggling and sinking fast, with a young family to support this is really getting to breaking point. Any advice would be great. Thanks in advance.

[MelanieGiles]

It would be a very difficult IVA to propose, whilst the properties are unsold, as the shortfalls would have to be estimated and this could really throw our the targeted dividend. If you only had one property, this could be workable, but with several which are already in negative equity, in a flat housing market, I would be very hesiatant in recommending an IVA to be frank.

You should also be aware that if you have secured borrowings with the same lenders, then they could offset a shortfall in one property against a surplus in another.