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Discussion and questions about what to expect when your bankruptcy is finished
My daughter went bankrupt 8 months ago. She is joint owner of a property which her ex partner lives but there is little if any equity in the property. The OR placed a Restriction Order via the land registery against the property. My question is - how long does this Restriction last and also does this incurr any additional costs as time goes on?
As the property is in negative equity they will value the property 2yrs and 3 months after the bankruptcy order, if the property is still in negative equity the OR will write and inform your daughter they have no interest in the property and at that point release the restriction
Hi there Peter

Given there is no equity in the property, the official receiver will do absolutely nothing unless your daughter takes action. The OR is quite within their right to wait for 2 years and 3 months from the date of the bankruptcy. After that time they will revalue the property. As Kelly says if there is negative equity at that time or your daughter's share of the equity is less than £1000 then your daughter's beneficial interest in the property will be simply returned to her and the restriction order lifted. However if the property has gone up in value and your daughters share of the equity is valued at more than £1000, then the OR can put a charge against the property for that amount.

If she thinks that the value of the property is going to rise in the next couple of years thus risking the possibility of a charging order, the best thing for her to do is get a third party yo buy her interest back from the official receiver. This will cost £1000 but after that the OR gives her back her interest and the restriction order will be lifted immediately.

All in all, if your daughter choses to do nothing, no additonal cost is added as time goes on but she does risk the property value rising and the possibility of a charging order being issued, although she may feel that this is unlikely in the current market.....
Hi there and thanks for your replies. Sorry for not getting back in touch sooner, I have been away.

I am not sure whether my daughter will be able to raise the £1000 needed to life the restriction order now and her ex is certainly not going to help do this. If no extra costs are added by the official receiver then I think it will be best for her to just wait it out. I do not hold out much hope of the property rising in value in the next 3 years or so. With the way things are going it is more likely to fall I would think.

Many thanks again for your help. It has put my mind at rest somewhat.
Hi there Peter,

These are never easy situations. Given that your daughter is not able to get together the £1000 needed to buy back the interest in the property now then waiting it out and hoping the price does not go up in the mean time is the right thing. As you say I am not sure there is much change of house prices rising significantly in the next few years. Is the mortgage on the property up to date? Is this being paid on time each month?
Given you feel that the property will not increase in value or even fall then waiting it out seems sensible Peter. Glad to hear that the mortgage is up to date. Lets hope it stays that way!