Q: Will I lose my home?

A: The Official Receiver appointed to your Bankruptcy case will take control of all your assets – including your home. They may have to sell your home to repay your bankruptcy debts, this applies whether your property is freehold, leasehold, jointly or solely owned. The Official Receiver (also known as Trustee or Insolvency Practitioner) will discuss this with you in advance as each case is judged on an individual basis. It will also depend on if you have fallen into arrears with mortgage repayments.

Q: When will the Official Receiver or Trustee sell my home?

A: If you have children at home / and or a partner, it could be possible to put the sale of your property off for 12 months. This will give you an adequate amount of time to find alternative living arrangements. You should discuss this with your appointed Official Receiver.

Q: Can anything be done to stop the Official Receiver selling my home?

A: If a partner, relative or friend can buy your half of the home then this could stop the Official Receiver from selling your property.

Q: What does beneficial interest mean?

A: Beneficial interest means the interest in the proceeds from the sale of a property.

• If you are a sole owner, the beneficial interest is the whole value of the property
• If you own a property jointly, the beneficial interest is usually an equal share of the property value

If there are debts outstanding on the mortgages or if you have other loans secured on the property, these will be repaid from any proceeds of the sale.

Q: What happens to the beneficial interest and legal title of my home when I’m made bankrupt?

A: Beneficial interest will always transfer to the Official Receiver handling your case. If your home is solely owned, the legal title will usually transfer to the Official Receiver too. If you jointly own the property, the legal title will remain with you and the co-owner, but this will not prevent the Official Receiver to take action as the beneficial interest in the property will be used to raise money to repay your creditors.

Q: What should I do if someone I know wants to buy the beneficial interest in my home?

A: If you know someone interested in buying the beneficial interest, they should contact the Official Receiver or Insolvency Practitioner who is handling your Bankruptcy. If the home is jointly owned, the person interested in purchasing the beneficial interest could take part in a low cost conveyancing scheme, which is run by The Insolvency Service and a firm of solicitors.

• The person who wants to buy the beneficial interest and legal title will have to pay for:
• A solicitor or licensed conveyancer to act for them in transaction
• The Official Receiver’s legal costs. This must be paid in advance and includes an allowance for expenses which may be incurred in the transaction. If the allowance is not fully used, money will be refunded
• An independent valuation (unless a recent valuation of the property has already been carried out)

The purchase price for the beneficial interest is based on the valuation. If your home is worth less than the amount you owe on it, the price of the beneficial interest will be set at £1.

If the property is mortgaged, the lender may have to agree to the sale. A solicitor or the licensed conveyancer dealing with transaction will be able to advise on this.

Q: Can I buy the beneficial interest if I am the sole owner of the property

A: Might not include this

Q: What happens if no one buys the beneficial interest?

A: The beneficial interest will remain with the Official Receiver and will not return to you – even when you are discharged from Bankruptcy. Beneficial interest may increase over time if the market value in your home increases; this will be used to repay your debts. Your property could be sold after you have been discharged – so if the beneficial interest hasn’t been bought before you move out, it will eventually be sold.

Q: Will I lose my home if I live in a rental property?

A: If you fail to keep to the terms of your tenancy agreement and continually miss rent payments, your landlord could take action against you. The Official Receiver will have no interest in your rented property, but they will contact landlords in the majority of cases to inform them that their tenant(s) have been made bankrupt.