Welcome to the forum MB30.

I understand that you aren't clearing the debt because its interest-only, but can you afford your debt repayments (all of them) at the moment?

Are you behind on anything? Have your other debts been growing?

How much of a priority is staying in this home?

I am struggling with the monthly repayments and have arrears of about 6 months on the Welcome account.
I also have arrears with my mortgage lender which I am in the proccess of trying to clear.
I have an old credit card bill of £200 to clear but dont have any other debts to pay.

I dont need to stay in the property but cant sell as I dont have enough equity to pay Welcome.

Have you been told that you cannot sell it after having asked the lender(s)?

Or is it the case that you're unwilling to do this as you'll still have a debt to the secured lender if you do?

My mortgage lender dont have an issue with me selling my property and id happily do so but there wouldnt be enough equity in the property to pay off Welcome as well.
so I feel im in a catch 22 situation??

I was in a similar situation MB30. I had negative equity. I surrendered the property to the bank. Once you're rid of the house the secured loan becomes unsecured and part of the TD, as does any shortfall on the mortgage.

It's not that a secured loan cannot be included in a trust deed, MB30, but the process does not remove the secured lenders right to repossess the property. The upshot is that in order to clear this Welcome debt then you are probably going to have to give up the house. You may be able to sell it yourself if you speak to your secured lenders, or you can surrender the property for repossession and sale instead.

Any shortfall on a secured debt is basically then unsecured and is discharged in the trust deed (or sequestration). However, you do not necessarily have to wait until the property is sold and the shortfall known before you enter the procedure.