Care and support

What happens to my home?

If you own your home or have a financial interest in it or any other property you must seek help and advice before considering bankruptcy. This is very important - you could lose your home or have a legal charge made against your share of its value which would have to be paid when you come to sell your home in the future.

The home may have to be sold to go towards paying your debts. This applies whether your home is leasehold or freehold or whether it is solely or jointly owned with someone else.

If your husband, wife or children are living with you, it may be possible for the sale in the bankruptcy to be put off until after the end of the first year of your bankruptcy. This gives time for other housing arrangements to be made. Your husband, wife, partner, a relative or friend may be able to buy your interest in your home from the trustee.

If the trustee cannot, for the time being, sell your home, he or she may obtain a charging order on your interest in it, but only if that interest is worth more than £1,000. If a charging order is obtained, your interest in the property will be returned to you, but the legal charge over your interest will remain. The amount covered by the legal charge will be the total value of your interest in the property and this sum must be paid from your share of the proceeds when you sell the property.

If you were made bankrupt before 1 April 2004, after a certain time, usually 3 years, if your trustee has not sold or obtained a charge over your interest in the property, or applied for an order of possession or obtained a charging order against the property, or you have not come to any arrangement with your trustee about that interest, it may be returned to you.

A leaflet called What will happen to my home is available from your local Official Receiver's office or www.insolvency.gov.uk.

If you rent your home, the trustee will normally have no interest in it and therefore cannot sell it. However, if you do not comply with the terms of the tenancy agreement, the landlord may take action against you. In most cases the Official Receiver or your trustee will need to tell your landlord that you are bankrupt.