Bankruptcy & the Family Home


The loss of a bankrupt’s family home is usually felt more intensely than the loss of any other asset.

Understandably, bankrupts know that the loss of the home will disrupt the family unit, not only affecting the bankrupt but also their children and partners/spouses that may be solvent.


How does Bankruptcy impact the Family Home?


When the family home is jointly owned by the bankrupt and a solvent (non-bankrupt) co-owner, the trustee can still insist on the bankrupt’s share of the equity being realised (the home being sold).

A joint tenancy is automatically severed upon the bankruptcy of any one of the joint tenants insofar as it relates to the ownership interest of the bankrupt.

This occurs due to the ‘involuntary alienation’ or severing of the legal rights of the parties necessary to create a joint tenancy.

After the severing of the joint tenancy, those interests in the property are held as ‘tenants in common’.

The equity of the family home will usually be determined by a property valuation.

The family home will be realised when it is sold.

Where there is a co-owner, the trustee will usually take these steps:

  • Allow the co-owner to buy the estate’s interest in the property.
  • If that is not possible, see whether the co-owner will join with the trustee in cooperatively marketing the property on agreed terms.
  • If an agreement on selling the property cannot be reached, the trustee can ask the Court to appoint a ‘statutory trustee for sale’ over the co-owners interest to force a sale of the property.

From here, the sale process will begin.


Contact Us


If your family home may be realised due to bankruptcy and you would like to know more, contact us at Bambrick Legal today. We offer a free, no-obligation 15-min consultation for all enquiries.

You can also read more about our Insolvency Law services here.

Related Blog – I’m Bankrupt! Will This Affect My Employment & Income?

Send us a message

For enquiries, please fill in the following contact form