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A good starting point for bankruptcy questions
By HardChoices
#32851
Hi. I was wondering if I will loose my house if made bankrupt? The property is in negative equity. Current value is 180k and outstanding balance is 225k. Mortgage payments are £826 and i am up to date with these.
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By Hayden
#32864
Hi HardChoices and welcome to the forum :)

Going bankrupt does not always mean that you will lose your house. In fact if the property is in negative equity like yours then the house is actually not at risk. The official receiver (OR) will not try to sell a house if there is nothing to be gained financially by doing so.

The only thing you need to be aware of is the fact that the OR keep what is known as the beneficial interest in the property for 3 years. This means that at the end of three years if the house has gone up in value and there is equity then there might be a risk at that time. However you can protect against this by buying back the beneficial interest from the OR. Read more information about this here: How will my property be affected by Bankruptcy?