If I become Bankrupt will I lose my house?

If you own your home, whether it is leasehold or freehold, or owned solely or jointly, mortgaged or otherwise, your interest in the property in effect goes into the pool of assets which will be sold to raise money to repay your creditors.

If your wife, husband or children are living with you in the house, it is usually possible to delay the sale of the property until after the end of the first year of your Bankruptcy. This is to provide time for you to make other housing arrangements. It can be possible for your partner to purchase your interest in the property thereby enabling you all to continue to live there.

If the Official Receiver cannot sell your house, then so long as your interest is worth more than £1,000, he may get what is called a "charging order" over it. This means that a legal charge is placed on your property at the Land Registry and the value of your interest will be repaid via the solicitor handling the sale of your property to the Official Receiver when the property is eventually sold.

If your property increases in value after the date of your bankruptcy, the increase in the value of your interest belongs to the Receiver, not you.

If, after a certain period, usually 3 years, the Receiver has not sold or obtained (or applied for) a charge over your house, or applied for a possession order, or you have not arrived at any arrangement with the Receiver about your interest in the property, then the property may be returned to you.

This answer is designed to provide an over view of the situation relating to your house. The situation regarding your house can be complicated and you are strongly advised to take legal advice.

 

 

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