Help! Complicated Debt:can't see the woods for the trees

worriedspidergirl

My situation I imagine is far from unique but I have hit a wall and rather than look for a rock to crawl under I need some real advice, please don't be gentle!
My situation:
I have a £145k mortgage on the house which is £850 per month. The house is unlikely to be worth any more than £130k at the moment. I also own a second house which has a mortgage of £100k which costs £525 per month and I have tenants which pay £400 and I top up the rest. This house was on the market for ages but didn't sell, its probably worth about £75k at the moment. My debts total about £350 a month and my bills are manageable at the moment.
My debts are made up of:: credit card debts, an unsecured loan, an old bank account overdraft and student loans. I went to the CAB and they prepared me a financial statement which allowed me to make arragements direct with the debtors. I have been paying a very small agreed amount now for over 12months and I still get chasing letters. I have thought the obvious - selling a house but nothing is selling and the amount either house would sell for is likely to be less for a quick sale.
My income allows me to pay these small agreed amounts and live - its a very very tight budget and all luxuries went over a year ago! I am a single mum to an 8yr old and our lives are simple.
My credit rating is bad and I don't think these arrangements are helping it. What can I do? I know that further borrowing is illadvised when there's debt but I know that if i had been able to borrow more on my house I could have managed the smaller amount - even though its a false economy to do so.
I have thought about an IVA and bankrupty and although it may sound selfish, I don't want to have to give up the 2nd house - I have struggled for 9 years to pay the 2 mortgages and we have gone without - I know that if I give it up now it will have been for nothing.
How can I rebuild my credit? Can I consolodate my debts and help rebuild my credit? Can i qualify for an IVA or even bankruptcy with having 2 homes both in negative equity? I know that nobody wants to have to give things up and the debts i have i inherited from a previous property venture where i was screwed over but i still have to pay the money back.
Please please please - any advice is gratefully received and read.x

GeorgeUK

Welcome to the board.

I can't advise on IVA's, but i've seen some threads where even after an IVA was completed they were still required to sell their property to make final payments to their creditors.

Can you post up a statement of affairs for us to see exactly what you are spending and what on? There might be some savings that can be made that possibly haven't been looked at before.
http://www.makesenseofcards.com/soacalc.html

Are there endowment olicies on the properties? Are these worth anything? Have you looked to see if these were missold? (Don't know anything about that area i'm afraid).

Might also be worth looking into whether you can reclaim charges and if there was any payment protection insurance that could be reclaimed.

DadsDown

You might also want to consider getting an estate agent to value your properties again, and to re-evaluate the amount of rent you can achieve on the second property. An increase in rental payments would help.
I don't think you would get a good reception trying to go bankrupt, etc when you have two properties. This may mean you would lose everything, so would only be a very last resort, especially as you have fought for so long. Having said that, if you could sell the second house it would at least reduce your payments.

Oneday77

To be honest I would look at increasing the rent on the second home. I know it won't be the most popular choice but depending on the locale, size and condition £400 for private rent is quite cheap in some areas. Even an extra £50 month will help you out.

The SoA is essential for anyone to provide some sensible advice so please post one, we all know its hard but it helps.