How bankruptcy affects your home


If you own your home any interest you have in it may have to be sold to pay your debts. The sale may be put off for 12 months after your bankruptcy.

Purchasing your interest

Your spouse, partner, a relative or friend may be able to buy your interest in your home from the trustee. This would prevent the property being sold.

Increase in property value

The benefit of any increase in value of your home will go to the trustee to pay your debts, even if it is sold after you have been discharged from bankruptcy.

Until your interest in the home is sold, or the trustee obtains a charging order over it, that interest will continue to belong to the trustee for a certain period, usually 3 years. This includes any increase in its value.

If the property cannot be sold

If the trustee cannot, for the time being, sell your home, they may obtain a charging order on your interest if it's 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.

Your home may be returned to you

After 3 years your home may be returned to you if your trustee has not:

  • sold or obtained a charge over your interest in the property
  • applied for an order of possession or obtained a charging order
  • come to any arrangement with you about your interest in your home

See further information on how bankruptcy can affect your home from the Department for the Economy (DfE).

Developed with:
  • Department for the Economy