For anyone to advise you will need to provide more details
How long was the marriage?
What are your ages?
How old are the children?
Are there any assets shares, savings etc?
Are there any debts?
What are your respective incomes including benefits?
Are there pensions and what are their values?
Can you also clarify if the value of the FMH is £60k? Whose name is the property in? Whose name is the mortgage in?
It would be interesting to see what others think, but if she cannot afford to make mortgage payments there seems little option but to sell the property, surely repossession would occur anyway? The debts of marriage are treated in the same way as assets and their division would need to be based on the factors in S25 of the Matrimonial Causes Act.
If she is refusing to sell, I think your only option is to get the Form A in and get these debts resolved asap.