Updated October 2026 · Fraser Bond
Bankruptcy
Your share of any equity in your home becomes part of the bankruptcy estate
Trusteedeals with assets
3 yearsto deal with home
Familyinterests considered
Adviceget it early
In short: If you're made bankrupt in England and Wales, your beneficial interest in your home passes to the trustee (often the Official Receiver). The trustee may sell it, or allow a spouse or family member to buy out the share. If the trustee hasn't dealt with the home within three years, it normally returns to you. Tenants' tenancies usually continue, but rent arrears and future renting can be affected.
| Situation | What usually happens |
|---|---|
| You own with equity | Trustee seeks to realise your share (sale or buy-out) |
| Little or no equity | Trustee may not pursue it; it can revert after three years |
| Joint owners | Co-owner keeps their share; may buy yours |
| Renting | Tenancy usually continues; arrears may be included in the bankruptcy |
Before deciding on bankruptcy
Frequently asked questions
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Will I lose my house if I go bankrupt?
Possibly, if there's equity. Family members can sometimes buy the share instead.
Can I rent after bankruptcy?
Yes, though some landlords will ask for a guarantor.
What is the three-year rule?
If the trustee hasn't dealt with your home within three years, it usually reverts to you.
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