It is a different matter when you have a number of negative equity rental property to deal with, instead of just your own home.
Option 3 – Negative Equity Rental Property
When you are dealing with a number of rental properties that are in negative equity, it would be unwise to use the method we suggested for a single property.
If we used that method, you would have multiple lump sum settlements to deal with, which would not be affordable.
Individual Voluntary Arrangement (IVA)
With this method a legal agreement is drawn up and registered with the court system.
Your rental properties are sold and the exact negative equity is realised.
With this method, you can also include any other unsecured debt you might have, like loans or credit card balances too.
There is then a meeting of Creditors and an agreement is reached on a considerably reduced debt amount.
This amount is paid off monthly for at least 5 years, after which you will be debt free.
There are no up front fees to pay and your income and outgoings are taken into consideration when setting the monthly payments of the IVA.
There is also a “lump sum” type of IVA available as well that only lasts for about a year. You can ask about this when you get in touch.
If your debts are even more serious then have a look at Option 4 – Bankruptcy the Only Option?