Do you lose your house if you go bankrupt?

What happens to your home when you go bankrupt?

When you go bankrupt, your interest in your home passes to the trustee in bankruptcy, and if your equity is more than £1,000 once the mortgage and other secured debts are paid, the trustee can sell the property or apply for a charging order, which fixes what the trustee will get if it is sold later (GOV.UK (opens in a new tab)).

So you do not automatically lose your house. Whether you do depends on the equity, who else lives there and what the trustee decides, all within limits the Insolvency Act sets. Our guide to how bankruptcy works covers the rest of the process.

If you own the home on your own, legal ownership passes to the trustee along with the equity, and a bankruptcy restriction on the land register means you cannot sell it. If the trustee has not started to deal with the home within 3 years, it usually passes back to you (section 283A (opens in a new tab)).

You must keep paying a mortgage if you carry on living in the property, because secured debts are not cleared by bankruptcy (GOV.UK (opens in a new tab)).

What happens to a jointly owned home?

If you own your home jointly, your share of the equity passes to the trustee while the other owners keep theirs, and a Form J restriction on the land register means the trustee is told about any dealing with the property, such as a sale (GOV.UK (opens in a new tab)).

To sell a jointly owned home the trustee has to apply to the court, which weighs your creditors’ interests against the needs and resources of your spouse or partner and the needs of any children. Once a year has passed since the bankruptcy began, the court assumes the creditors’ interests come first unless the circumstances are exceptional (section 335A (opens in a new tab)).

GOV.UK says a sale can be delayed for up to a year if you need to arrange somewhere for children or a partner to live. If the home really belongs to your partner and you have no share in it, the owner can apply to HM Land Registry with a signed statement to have the Form J restriction removed.

Can I keep renting if I go bankrupt?

Yes, you can usually keep renting if you go bankrupt: your landlord might be told, but GOV.UK says it is unlikely you will be asked to move out if you are up to date with your rent (GOV.UK (opens in a new tab)).

Rent counts as one of your living costs. When the trustee works out how much spare income you have, rent or mortgage payments, bills, food and clothing are allowed for before any income payment is set (GOV.UK (opens in a new tab)).

Can a family member buy my share of the home?

Yes, a family member or partner may be able to buy your share: GOV.UK says you might be able to stop the sale of your home if the equity or legal title can be sold to someone else, such as a partner (GOV.UK (opens in a new tab)).

The Act also lets you agree with the trustee to pay a set amount into the bankruptcy in return for your share of the home leaving it (section 283A(3)(e) (opens in a new tab)). The amount and terms are for the trustee to agree, so speak to them early.

If keeping your home matters most to you, compare how an IVA treats your home. Under the IVA Protocol 2025 (opens in a new tab), a protocol IVA runs for 72 months instead of 60 in place of releasing equity when your share of the home is worth £10,000 or more. An IVA carries fees and affects your credit rating too.