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Your home and bankruptcy

If you are made bankrupt, control of your assets (property, shares etc) passes to the person appointed to manage your bankruptcy called a 'trustee'.

Your home is an asset and can be sold if this is the only way for your trustee to pay your creditors (people you owe money to). If your home is being sold, your creditors will be paid after any mortgages or secured loans have been repaid. You should get independent advice on how bankruptcy can affect your mortgage or any loans secured against your home.

Renting and bankruptcy

Bankruptcy can affect your renting situation and you should check the tenancy agreement you have with your landlord. You might be able to get help with your rent and organisations like Citizens Advice can advise you about Housing Benefit or Local Housing Allowance.

• Mortgage Help campaign website Opens new window

• Housing Benefit

• Find your local Citizens Advice Bureau

Bankruptcy – your rights over your home

If you are made bankrupt, the following rights over your home can be transferred to your trustee:

• the beneficial interest in your property - this is your share of the property’s value after any secured debts (like mortgages and loans) have been repaid
• the legal title, but only if you are the sole owner - this is the document showing who the legal owner is

Details of these transfers are recorded in a public register of land interests for England and Wales called the ‘Land Registry’. The entries are not removed until the property is no longer a part of your bankruptcy estate (one of the assets being used to pay your debts).

Your home or business address will be linked to your bankruptcy and details kept on another public register called the ‘Land Charges Register’. These entries are removed five years after the start of your bankruptcy and can affect any applications for credit that quote the address.

Sole ownership of a home and bankruptcy

If you are the sole owner, the legal title and your beneficial interest is transferred to your trustee. You can’t sell the property or claim any money raised from a sale. A Bankruptcy Restriction Notice will be placed on your property’s entry in the Land Registry confirming this.

Joint ownership of a home and bankruptcy

If you share the ownership of your home with someone else you are a joint owner. The legal title and beneficial interest is not transferred to your trustee. However, there are certain restrictions called ‘Form J Restrictions’ that are entered in the Land Registry. This means your trustee:

• can ask the court to order you to sell your home
  
• can claim your share of the beneficial interest if the property is sold
  
• will be told of any dealings connected with your home - for example, if you attempt to sell it

• Getting details about land or property ownership (home and community section)

• Contact the Land Registry

How long is your home at risk of being sold?

Even after your bankruptcy ends, your trustee can keep the rights over your beneficial interest and/or legal title. This is usually for a period of three years from the date your bankruptcy started and can be extended if, for example:

• you have been ordered by the court to sell your home
  
• you did not tell the trustee about a property you have a financial interest in

You should speak to your trustee about how long your home may be at risk of being sold to pay your bankruptcy debts.

• Find an insolvency practitioner

• Contact your local Official Receiver

Bankruptcy – after your home is sold

Money raised from the sale of your home will be used to pay your bankruptcy debts after any secured debts (like mortgages or loans) have been repaid. If there is enough money to pay the costs of your bankruptcy and all of your debts, your bankruptcy order might be annulled (cancelled).

• Bankruptcy - how your debts are paid

• Bankruptcy - how and when it can end

Bankruptcy – stopping the sale of your home

You might be able to stop or delay the sale of your home if:

• the value of your beneficial interest is less than £1,000
  
• the court decides there are exceptional circumstances to your case
  
• the beneficial interest or legal title can be transferred to someone else – for example, a partner or friend
  
• you need to make housing arrangements for children or a partner – the sale can be delayed for up to one year

You should get independent advice and contact your trustee if you want to stop or delay the sale of your home.

• Find a solicitor or advice agency

More useful links

• Debt - where to get free help and advice

• Selling your home (home and community section)

Useful contacts

• Money, tax and benefits contacts