Reader Q: Is it possible to be made bankrupt and still keep your house?

Reader Question:

Is it possible to be made bankrupt and still keep your house?

My response:

If you own a property on your own and the sum of your assets does not cover your debts then it is likely your home will be sold to pay off your creditors. You may be granted a year to complete the sale.

If you own a property with your wife or partner then the court will make a judgement on whether to force a sale taking into account the following circumstances.

• Was your partner complicit in the cause of your debts problems
• Are there young children living in the property - in which case any sale can be delayed for up to a year.
• Is there equity in the property after the mortgage has been cleared
• Has the person made bankrupt complied with the instructions of the Official Receiver in all matters
• Only the part of the equity that is owned by the person made bankrupt can be used to pay creditors

There are no set rules regarding the sale of a property and each case is taken on its merits.

For more information please read my article 'Bankruptcy explained' and the Government's official guidance.