What happens to your house will depend on a number of things, such as whether you own it yourself or jointly with someone else and if you live alone or if there are others living in the house. Your trustee will also look into what your house is worth and what loans are secured on it.

What if I own a house?

If you own the house you live in, or any other property, it will transfer to your trustee along with your other assets. Your trustee will always carry out a search of the Land Registers to make sure that you do actually own the property. Your trustee can sell your house or allow your spouse, partner or family member to buy out their interest in it. If your trustee decides to sell it, the house may be sold on the open market. Your trustee must obtain the best price possible. You are not allowed to sell the house.

Your trustee will take many things into consideration when deciding what to do with the house. They will consider the amount of equity, whether there are children or other dependents living in the house and how the trustee's actions will impact on paying your debts.

It is in your own best interests if you do own a house, either by yourself or with somebody else, to obtain independent legal advice as soon as possible and preferably before you are bankrupt. Your discharge from bankruptcy does not automatically transfer your property back to you.

What if I used to own a house?

If you used to own all or part of a house and sold it, or gave it to your spouse, partner, or to anyone else, for less than the full market value, your trustee can ask the sheriff to change that transfer and to allow your trustee to reclaim your interest in the property. Your trustee will also ask you to explain what happened to any money you received for the property.

What if my house is rented?

If you rent your home, your trustee normally has no interest in the house provided you can show proof that it is rented. However, you may have to move if your trustee thinks you are paying too much rent. They can apply to the sheriff to set a limit on how much rent you should pay, to allow you to pay a contribution towards the costs of your bankruptcy and the payment of your debts.

If you have rent arrears, your landlord should not take any action to collect them once you have been made bankrupt. They can, however, take action and seek your eviction if you fail to pay your rent after the date of your bankruptcy.

What if the house is jointly owned by me and someone else?

If you own the house jointly with your spouse, partner or someone else, your trustee will discuss options with all parties. Co-operation of the joint owner or owners will minimise the stress and costs of realising your share of the house.

Your trustee can agree to the joint owner buying out their interest in the house. This can be in a lump sum payment, regular payments or through a re-mortgage package. The trustee will normally agree to such an arrangement if they get the current equity value for their share of the house. Your trustee and the joint owner would each pay their own legal expenses.

Other options include the joint owner selling the house and paying your trustee the relevant share of the net proceeds. Alternatively, the joint owner might agree to your trustee selling the house and receiving their share of the net proceeds. The joint owner cannot sell without the permission of your trustee.

If the joint owner does not co-operate in a sale and is unwilling, perhaps unable, to buy out your trustee's interest in the house, your trustee can ask the sheriff for authority to sell it. The sheriff will consider all circumstances, such as the amount of equity, whether there are children or other dependents living in the house and how the sale will impact on paying your debts.

What happens if I cannot pay my mortgage?

If you have a loan secured on your house and you do not continue to make your mortgage payments, your secured lender can repossess the house.

If there is a secured loan on your house your trustee is powerless to stop your secured lender from repossessing it. If your house is repossessed and sold by the secured lender and there are any proceeds left after their debt is paid, these will be transferred to your trustee.