Applying to become bankrupt
6. Your home
Your home might be sold depending on your equity - your share after any secured debts (like a mortgage) have been paid.
You might have to give up:
- your equity
- legal ownership of the property if your equity is £1,000 or more
If your trustee hasn’t put your home up for sale within 3 years it will be transferred back to you.
The equity and legal ownership are transferred to your trustee. This means you can’t sell the property or claim any money from a sale.
A bankruptcy restriction or notice is added to your property’s entry in the land register to say this.
It can only be removed if it’s been added to your property by mistake. Send HM Land Registry a signed statement saying you aren’t bankrupt and an application to change the register for a property.
The equity is transferred to your trustee.
A ‘Form J restriction’ is added to your property’s entry in the land register. This means your trustee will be told of any dealings connected with your home, for example if you try to sell it.
It can be removed if you can prove you (as the bankrupt) don’t have a share in the property, for example if your partner owns the property. The owner has to send HM Land Registry a signed statement saying they aren’t the bankrupt person and an application for the cancellation of a Form J restriction.
Stop the sale of your home
You might be able to stop or delay the sale of your home if, for example:
- the value of your equity is less than £1,000
- the equity or legal title can be sold to someone else, such as a partner
- you need to organise somewhere for children or a partner to live - the sale can be delayed for up to 1 year
You may want to get legal advice to find out if you can stop or delay the sale of your home.
Check if you can get legal aid to help with your legal costs. You can get advice from Civil Legal Advice if you’re eligible.
Your landlord may be told that you’re bankrupt and your rental situation may be affected.