Introduction
Are you concerned about what might happen to your home if your partner goes bankrupt? This article will guide you through the potential impacts of bankruptcy on your living situation and outline the steps you can take to protect your home. Understanding your rights is crucial during this challenging time.
What Happens to Your Home if Your Partner Goes Bankrupt?
If your partner is declared bankrupt, you may be worried about the future of your home. While there is a risk that you could lose it, there are steps you can take to protect your living situation. Here’s what you need to know about the potential impact of bankruptcy on your home and your options for safeguarding it.
Understanding Home Ownership
The first thing to consider is who owns the home.
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Sole Owner: If you are the only person listed on the property deed, the bankruptcy trustee typically cannot make a claim on your home. This means you are likely safe from losing it.
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Joint Ownership or Partner’s Name: If your partner owns the home or if it’s jointly owned, there’s a chance that the home may be at risk. The extent of this risk can depend on how much your partner’s interest in the home is valued. If their interest is worth less than £1,000 and remains below that threshold for three years after their bankruptcy, the trustee cannot sell your home.
Delaying the Sale of Your Home
If your home is at risk, the bankruptcy trustee must seek court approval to sell it. As the partner living in the home, you can request a delay of up to 12 months from the date of the bankruptcy order. This gives you time to find a new place to live. However, it’s crucial to start looking for alternative housing during this period, as failing to do so may not be accepted as a reason to prevent the sale.
Stopping the Sale of Your Home
There are a few ways you might be able to stop the sale altogether:
- Exceptional Circumstances: The court may allow you to keep your home if you can demonstrate exceptional circumstances. For example, if you have a disabled child and the home has been adapted to accommodate their needs, or if you are over the age of 70, you might qualify for this exception. It’s advisable to have your partner discuss these circumstances with the bankruptcy trustee.
- Buying Your Partner’s Share: If you can afford it, you can buy your partner’s share of the home from the trustee, which is known as their beneficial interest. The price should reflect the market value, minus any costs associated with selling the home. Keep in mind that your partner cannot simply transfer their share to you to avoid bankruptcy consequences, as this is illegal and could lead to serious penalties.
- Finding Financial Help: If you can’t afford to buy your partner’s share, consider asking a family member or friend for assistance. They could purchase the share and allow you to continue living in the home. Make sure to seek legal advice before proceeding with this option.
What If You Rent Your Home?
If you and your partner are renting, it’s generally less likely that you will lose your home due to their bankruptcy. However, there are exceptions. Your home might be at risk if:
- The property is part of your partner’s bankruptcy estate (this usually doesn’t apply to most secure tenancies).
- Your tenancy agreement states that a bankrupt person cannot be a tenant.
- There are existing rent arrears or other legal issues related to your tenancy.
If any of these situations apply, it’s best to seek specialized housing advice.
Next Steps
If you find yourself in this situation, the most important step is to seek professional advice. Understanding your rights and options can help you navigate this challenging time. For detailed information on how bankruptcy can impact your home, you can refer to the Insolvency Service’s publication on Bankruptcy: what will happen to my home?.
For personalized assistance, consider trying Contend’s legal expert chat. You will receive guidance to help you understand and resolve your legal problems.
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