The question that is asked the most and provides the greatest amount of anxiety. In bankruptcy am I at risk of loosing my home? Get expert financial advice
This is probably the question asked most and provides the greatest amount of anxiety when you have been made or are considering entering into bankruptcy.
I can put your mind at rest. It is not always the case that you will lose your home.
If you rent, it is unlikely neither the Official Receiver nor a trustee will be interested in your property. This is as long as your rent is not excessive. The landlord will have to be informed of your bankruptcy. Usually, as long as you pay your rent on time, you should be able to stay in your home. However I would always advise that you seek legal advice to understand what may happen under your tenancy agreement.
However, if your rent is deemed excessive, you may be asked to seek accommodation with a lower rent. This enables surplus monies to be paid into your bankruptcy estate for the benefit of creditors.
If you own your home, whether solely or jointly owned, freehold or leasehold, mortgaged or with no secured lending, either the Official Receiver or a Trustee may have to sell your home to go towards paying your bankruptcy debts.
If your home is mortgaged, it is vital that you keep up with your mortgage repayments as if you default, your lender could proceed in taking legal action to sell your home. It is worthwhile thinking about contacting your lender to ascertain whether you could have a payment break, reduce your payments or change the type of mortgage you have. Being bankrupt does not mean that you cannot have a mortgage.
If a child (still in full time education or younger) or a dependent lives with you, it is likely that a sale of your property would be put off until the end of the first year of bankruptcy. During this time you should use your time wisely to weigh up your options and/or seek accommodation alternatives.
It is likely that you will be able to keep your home if:
- There is no equity (a trustee will use the term “beneficial interest) in your home.
- If a partner, relative, friend or third party is able to raise sufficient funds to purchase the beneficial interest.