Your BIL is well meaning but does not really grasp the practicalities. Its the sort of wide, sweeping comments people make having overheard something on the radio.
You owe X amount secured on a property worth less. You will not be able to sell the property without the consent of your lender - the supply of your Title Deeds to your Solicitor for a sale will be conditional on the Solicitor discharging the entirety of the mortgage debt. Which, if there are insufficient funds, patently they cannot do.
So, what BIL is suggesting is that you ask the Bank to agree to release the Deeds for a sale to your solicitor and at the same time come up with a realistic approach to getting rid of the larger debt while at the same time putting another form of loan in place to cover the shortfall. I think Brendan is right and that you will be asked to either make up the shortfall yourself, if you can, or put another form of security in place to cover it.
mf