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What will happen to my home in bankruptcy
For many people this is the question that they want an answer to. A home is where kids are brought up. It is where one feels safe and for many they have strived their whole lives to put this roof over their families heads and they want to know they can at least keep their house.
Whether it can be kept or not will depend on various factors. Firstly the job of the Official Receiver may be to sell the house to help pay for your bankruptcy debts. He will do so if it is the only way to release money to creditors. But he will only do so if there is equity and it is worth his while. So do you own your own house?
Owned Property
When you are made bankrupt your share of the equity in the property automatically vests in your Trustee. He then has up to three years to realise that value. He will try to deal with the property as soon as he can. If you have a spouse and children it is possible to put off the sale of the property for up to a year. This will give time to make alternative living arrangements. Also if the property is likely to realise less than £1,000 it will not be sold. This is often the case at present. You should take steps to deal with the property of you wish to retain it. If your spouse has a joint interest but is not made bankrupt, their share is not affected.
If there is equity in the property, a spouse or friend can negotiate a purchase of that equity from the Official Receiver. It may be possible to do so for a discount. Any purchaser would also need to pay the Official Receiver’s fixed legal fees, which are currently about £211 as at April 2008.
In order to stop any sale of the property the Official Receiver will put a Bankruptcy Restrictions Notice on the title of the property at the Land Registry to thwart any attempted sale without the Official receiver’s notice. If the property is bought back or transferred back as below for just a nominal sum plus legal fees, he will let the Land Registry know. If there is no equity in your property a spouse or another party will be able to buy back your interest for a nominal pound plus costs of about £211.
In a solely owned property, the property can be transferred to a nominated party, but there is no fixed fee, and so a more commercial rate for the conveyancing will need to be paid.
Tenanted Property
If you rent your property from the council or a housing association your rights will remain unaffected as long as you continue to pay your rent.
A private landlord may have a clause in the tenancy agreement which could enable him to take possession, but if you have been a good tenant and paid the rent on time we see no reason why the landlord should have problem.
The Official receiver will write to any landlord within a few days of the bankruptcy order being made but merely to advise that a bankruptcy order has been made.
About the Author:
Contact Steve Thatcher of Help With Debt (UK) Limited a total debt solutions company.
For all further reading see http://www.helpwithdebtuk.com
For personal contact email sthatcher@helpwithdebtuk.com
If you have any debt problem whatsover either personal or corporate make Steve your first call all advice is free. Finally if in the UK and you need a friend to speak to call 01162171406
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