Becoming bankrupt
Your home
The person dealing with your bankruptcy (the ‘trustee’) might sell your family home, depending on how much equity would be left after any secured debts (like a mortgage) were paid.
If your equity is more than £1,000, the trustee can either:
- sell the property
- apply for a ‘charging order’ - this fixes the amount the trustee will get from the property if you sell it later on
If the trustee has not started to deal with your family home within 3 years it will usually be transferred back to you.
If you’re the sole owner
The legal ownership of your home is transferred to the trustee, along with any equity.
A bankruptcy restriction is added to your property’s entry in the land register to say this.
You will not be able to sell your home.
If you own the property with someone else
Any equity you have in the property will be transferred to the trustee. You’ll still own the property with the other person or people who are joint owners.
A ‘Form J restriction’ is added to your property’s entry in the land register. This means the trustee will be told of any dealings connected with your home, for example if you try to sell it.
It can be removed if you can prove you do not have a share in the property, for example if your partner owns the property. The owner has to send HM Land Registry a signed statement saying they are not the bankrupt person and an application for the cancellation of a Form J restriction.
Stop or delay the sale of your home
You might be able to stop the sale of your home if the equity or legal title can be sold to someone else, such as a partner.
The sale can be delayed for up to 1 year if you need to organise somewhere for children or a partner to live.
Speak to your trustee to find out more about stopping or delaying the sale of your house.
Rented property
Your landlord might be told you’re bankrupt. It’s unlikely you’ll be asked to move out of the property if you’re up to date with your rent.