You should seek some advice as it is free and you do not even have to give your name if you are nervous. However, it does sound like an IVA is an option but any IP firm would need to look at the level of individual debts before giving any specific advice. Assuming both of you have debts it may be difficult to get creditors to accept a lump sum of £10k but if it was to settle only one party's debt it may have a reasonable chance of success.
The best option although it may not be the most palatable could be a voluntary sale of the property to fund a one off IVA to creditors. You would be allowed to retain sufficient funds for relocation and you could look for a newer property to rent where the maintenance costs would be minimal. The overall costs could be less than you are currently paying and your satndard of living could improve.
Creditors would normally allow up to twelve months for a sale of the property but regardless of what it sells for they would be bound by the proceeds and you could start again. In a couple of years when the children have all gone to school maybe you could get back into the workplace and you would be able to buy another property.
You will need to give this careful consideration, as an interest only mortgage clearly sees no no reduction in the capital amount owed - and you will need to consider how you are going to repay the mortgage at the end of its term.
Are you sure that hanging on to this house is actually worth the hours that your partner is working? Wouldn't rented accomodation without the worry of increasing interest rates over the next couple of years be an attractive option? You could then use some of the sale proceeds to make a full and final offer of settlement to creditors.
To rent round here is more than we are paying for a mortgage, so for us renting in the same area wouldn't be an option.
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