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Bankruptcy claims against the Family Home

In the majority of bankruptcy cases, the principal asset is the bankrupt's interest in the family home. It’s the largest asset most people own, and hence the biggest worry. Nobody wants to see their family have to suffer as a result of bankruptcy.


If you are worried about losing your home as a result of bankruptcy, we can help you through this difficult time, and ensure that you make the best decisions in order to achieve the right solution.

If you would like to speak to our team of specialists please call 0333 323 5292, email us at law@luptonfawcett.law or use our online contact form here.

Having Problems With a Bankruptcy Claim Against Your Family Home?

A common issue that arises in cases involving the family home is establishing the bankrupt's interest. The individual concerned may not be a registered legal owner of the property, but nonetheless have a beneficial interest in the property either by way of agreement or as a result of financial contribution.

Alternatively, the property may be held in joint names, but the owners contend that the bankrupt has a reduced share in the equity of the property either by agreement or by reason of unequal contributions to the purchase of the property.

Anyone that is declared bankrupt could find themselves in this position.

About Bankruptcy Claims Against The Family Home

Having established the extent and value of a bankrupt's interest in the family home, the Insolvency Act 1986 requires that a trustee realise that interest within three years of the date of the bankruptcy order.

If the trustee fails to deal with the interest within three years, then it will automatically re-vest the bankruptcy.

There are various ways in which the interest may be realised:

  • By selling the property back to the bankrupt or a third party. This is subject to agreement of the market value of it, taking into account any mortgages against the property. It is sometimes possible to stop your home from being sold if your partner or a relative agrees to buy your share of it from you.
  • By applying for an order for the possession and sale of the property.
  • By applying for a charge against the bankrupt's interest.

Where a property is jointly owned by the debtor and their partner, then there is some limited statutory protection for the bankrupt's family.

The court will consider their position when the application is brought by a trustee within one year of the bankruptcy order. However, after the first year has elapsed, the court will assume that the interests of the creditors outweigh all other considerations, unless the circumstances of the case are exceptional.

What Are The Consequences of a Bankruptcy Claim Against The Family Home? 

It is possible that your home may have to be sold as an asset of the bankruptcy.

If you rent your home, it is very unlikely that you will lose it, but there are circumstances in which the risk is heightened. If you benefit financially in some way from renting, for example, subletting, then the rental income may form part of the bankruptcy estate. Rent arrears may also cause an issue, as well as any individual letting agreements, such as the landlord specifying that he will not rent to someone declared bankrupt.

The Team

A well-established integrated commercial law firm, Lupton Fawcett has been practicing law for over 100 years. As a result of this experience, our approachable team is reassuringly straight-talking, open-minded and forward-thinking.

We provide advice on a wide range of legal issues to clients from our offices in Leeds, York and Sheffield.

We advise bankrupts, family members, and trustees in bankruptcy on all matters involving the realisation of a bankrupt's interest in the family home.

Our large team of over 280 passionate experts works tirelessly to provide a service tailored to your individual needs in order to guarantee your comfort and security.

Lupton Fawcett’s director, Nigel Whitfield, has over forty years of experience and is particularly renowned and highly respected for his knowledge and experience of many aspects of law.

Contact Us For Help

We provide advice on a wide range of legal issues to clients around Yorkshire from our offices in Leeds, York and Sheffield. For an initial discussion on the specific details of your case, contact our solicitors today using the details below.

Get in Touch

With Lupton Fawcett on your side, you're taking control. Contact us today.

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Remember you can still call us on 0333 323 5292 or email us at insolvency@luptonfawcett.law

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