Debt Advice Apply Easily Online Today !

What Happens To My Home During Bankruptcy ?

In the event that you are declared bankrupt then the Official Receiver or the Trustee may need to sell your home in order to repay your creditors. They are able to do so even if your property is freehold or leasehold, solely or jointly owned.

In cases where your debt has affected your ability to repay your mortgage then your lender may wish to sell your home.

How soon will my home be sold ?
Should your family be living with you then your house may not be sold immediately. In these cases you may find that nothing happens until the end of your first year of bankruptcy. It is important to remember though that all situations differ and therefore your home may still be sold earlier. If you have a friend or family member that can buy the beneficial interest in your home then this can stop the property from being sold. The person in question would need to contact the Official Receiver or trustee for further instructions regarding this.

The beneficial interest is the interest from the proceeds when the property is sold. This will transfer to the Official Receiver or Trustee once you have been declared bankrupt. Should your property be solely owned then the legal title will also transfer to them. However if your property is jointly owned then the legal title will still be with yourself and the joint owner.

In some cases it may be that nobody can afford to or will buy this beneficial interest and if this happens then it will stay with the Official Receiver or the Trustee in charge. It is worth noting that the beneficial interest will not return to you upon discharge so please be aware of this.

What will happen to my rented home in a bankruptcy ?
The Official Receiver or Trustee in charge of your bankruptcy will most likely have to inform your landlord that you are involved in bankruptcy proceedings. Your landlord will then decide what action they wish to take. If you are unable to pay your rent then your landlord is perfectly within their rights to take legal action against you.