Many bankrupts do not realise that even when they are discharged from bankruptcy (usually after three years), the bankrupt’s share of the home does not return to him but remains vested with the Trustee in Bankruptcy or Official Receiver.

There is no legal requirement for the Trustee in Bankruptcy to realise his interest in the house within a particular time (save that he cannot usually sell the house for a year after the bankruptcy order if the bankrupt has a spouse and/or child living with him). The Trustee is therefore perfectly entitled to sit back and wait for 20 years before doing anything. The Trustee might do this where there is little or no equity in the house and he waits until the property prices increase.

It is important therefore that the bankrupt’s home is dealt with as soon as possible and Leathes Prior can assist the bankrupt or his spouse (or family) in purchasing the Trustee’s interest. There are many arguments and claims that can be put on your behalf by Leathes Prior (both legal and practical) the effect of which may be to substantially reduce the amount the Trustee will accept.

Even if the house is solely owned by the bankrupt, the spouse may be able to claim an interest in the equity which will help to reduce the amount the Trustee would accept for his share. Likewise, if the spouse owns the house in their sole name, the Trustee might be able to claim an interest.

Leathes Prior can therefore negotiate on your behalf to ensure that you keep your home. One thing is for sure, if it is not dealt with sooner rather than later, you may not be able to afford to purchase the Trustee’s interest that may result in you losing your home.