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How will bankruptcy affect your family home

You should be aware that bankruptcy can result in the loss of your home. Serious consideration should be given to this fact when considering bankruptcy. You should always seek to obtain independent professional advice before entering the bankruptcy process. Under the Bankruptcy (Amendment) Act 2015, enacted in January 2016, the Official Assignee (OA) now has a three year period from the date of adjudication to monitor the valuation of your family home to decide whether it is negative or positive equity.  The Official Assignee having valued your family home will write out to you six months before the three year period elapses and inform you whether he believes your property is in positive or negative equity.

The policy of the OA is to sell his interest in family homes in positive equity to the bankrupt, once the purchase funds are proven not to be the bankrupt's/discharged bankrupt's.  Alternatively, he will sell his interest to the bankrupt's spouse/civil partner.  The OA will accept staged payments for up to a maximum of 12 months and on final payment will transfer his interest to the bankrupt or their spouse/civil partner.  If the bankrupt or spouse/civil partner is unwilling or unable to purchase the Official Assignee's share, he will apply to the Court for permission to sell the home on the open market.  It should be noted that the Official Assignee, is not entitled to sell your estate or interest in your home, without an order of the High Court under section 61(4) of the Act.

If your interest in your family home is in negative equity and the Official Assignee has not issued proceedings seeking sale of the family home within 3 years of the date of adjudication of bankruptcy, the family home may re-vest in you, subject to any existing mortgage.  If you do not wish the property to re-vest in your name, you should communicate that to the Official Assignee in writing.