Help Please :(

surrey-ed

Hi,

Other half and I bought a villa in spain 3 years ago as an investment, its a rental property that we rent in the summer. To cut a long story very short, buying and refurbishing the villa has got us into a lot of debt. Both in our twenties and got carried away with things.

We had to lay down £60k deposit on the place, we ended up having our fees increase by £40k and as such this ended up having to be raised by credit cards, loan and £35k loan from parents. Refurbishing has cost £80k

We have following debts:

- Credit Cards - 30k, all defaulted on and passed to debt collectors
- Loans with 2 banks - 20k, all up to date £390 a mth 5ys left
- Loan with parents - 35k, all up to date £375 a mth/8rs left of 10yr loan
- 2 x loans with Mortgage Provider - 20k all up to date 24 yrs left
- Mortgage on 1 bed flat worth 160k, £180k! all up to date 24 yrs left

Assests

1 Bed flat worth £160k but with £180k mortgage

5 bed villa in Spain worth £450k with a £180k mortgage. ON SALE - Bad news being that the villas in the area take 2 - 3 years on average to sell. We are not allowed to remortgage their either due to the terms of the mortagege (£1500 a month)

The villa does however make us £20k a year average after tax from rentals.

Really struggling in the UK and other half has just been offerred a job in Thailand, better pay than in the UK, no tax and accomodation provided. She has accepted the position as we feel its the best way to save money and its a 4 yr contract. STARTS JULY 2008

We have decided we can not afford the flat anylonger and cant meet our repayments, can someone advice what our options are please. Should we sell the flat and enter into an IVA or something? Really dont know, want to pay off our debt but cant afford to

What would happen if we stopped paying our mortgage?

chevalier

If you stopped paying your mortgage your flat would be reposessed. This would affect you credit rating for 12 years I think. Could you not rent out the flat if you go to Thailand? If the pay is better and accomodation there if free, then surely you would have a lot more money to pay off your debts with?
chev

Oldernotwiser

However slow the Spanish housing market is at the moment you can always sell anything at the right price and you have £270K equity in the property to manoeuvre with. I'd slash the price, sell it and move on.

surrey-ed

Thats what we have done, villa is worth £450k, we have put on market at £350k! Been on for 6 months and still no interest at all, neighbours has been on market 4 years and another guys 3 years!

Renting is an option but we would still need to cover 300 a month which may be possible but not with the credit card and loans!

so dont know what to do:(