Bankruptcy Restrictions Order
If you are made bankrupt, you may lose your home. This is a frightening prospect to face and can feel overwhelming. In this article we aim to answer your questions as simply as possible to limit your stress. We'll also explain how you can remove the bankruptcy restrictions placed on your property
When you are declared bankrupt, an Official Receiver (OR) will be assigned to your case. This will be a civil servant working on behalf of the insolvency service, who is also an officer of the court. If an Insolvency Practitioner has been appointed, you will have a Trustee instead of an OR.
Your Official Receiver or Trustee may have to sell your home to help pay your debts.
If your home is mortgaged and you fall behind on your payments. Your lender may be able to sell the property.
We can handle removing your bankruptcy restriction
Our Fixed Fee is £240 INC VAT
- Review Land Registry Restriction
- Draft a letter to your lender including your supporting documents requesting them to remove the restriction. We need to evidence to the Land Registry we have attempted to get the restriction removed by the lender.
What if your lender doesn't reply/remove the restriction or you don't have the right documents?
For an additional fixed fee of £360 INC VAT we can:
- Contact the party with the order requesting the removal.
- Submit evidence of discharge directly to the Land Registry with all supporting documents and evidence of request for removal.
- Replying to further requisitions. No refund is due if you are unable to remove the restriction.
We do not guarantee your restriction will be removed if the party with a mortgage/charge restriction does not consent to remove it.
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Remove a Bankruptcy Restriction | Restriction Wording | Cost to remove and documents required |
What if your lender doesn't reply/remove the restriction or you don't have the right documents?For an additional fixed fee of £360 INC VAT we can:
We do not guarantee your restriction will be removed if the party with a mortgage/charge restriction does not consent to remove it. | "(DATE) Restriction: No disposition of the registered estate, other than a disposition by the proprietor of any registered charge registered before the entry of this restriction, is to be registered without a certificate signed by the applicant for registration or their conveyancer that written notice of the disposition was given to DEBTOR at ADDRESS, being the person with the benefit of an Interim charging order on the beneficial interest of made by the COUNTYCOURT on COURTDATE (court reference REF." | £240 INC VAT Evidence of charging order, letter from lender confirming debt satisfied and (if applicable) bank statement showing payment in full. |
Will I lose my home under a Bankruptcy Restrictions Order?
Your home will be sold if it is the only way to release the money you owe to your creditors.
If you are the sole owner, the beneficial ownership and the legal ownership are transferred to the OR or Trustee.
If you have a mortgage or loan secured on the property, these would be paid first from the proceeds of the sale.
If you share your property, your share would be calculated from the total value (after payment of any outstanding mortage or loans), according to your beneficial interest. This is likely to be an equal share as your co-owner if you are Joint Tenants, but may be unequal if you are Tenants in Common.
Can I stop them selling my house?
The OR or Trustee may have to sell your home, whether your are sole or joint owner of a freehold or leasehold. However, if your spouse or child is living in the property - you may be able to delay this for up to one year.
In this time, someone may be able to buy your share of the beneficial interest back from the OR or Trustee. For example, a partner, friend or relative. They will take ownership of this share and the OR or Trustee won't be able to sell your property.
If the OR or Trustee's beneficial interest has not been bought-out after one year, then the court can order a sale. They will only make an exception in extreme circumstances, or if your share of the beneficial interest is valued at less than £1,000.
What is a bankruptcy restriction notice?
This is a land registry notice, which is automatically placed on your property in the event of a bankruptcy restrictions order, if you are the sole owner. It records that you are no longer the legal owner and cannot sell the property, or enter into any other dealings relating to it.
This notice will can be withdrawn by your OR or Trustee if they are paid their interest in the property, or, if the interest is returned to you.
What is a Form J restriction?
If you jointly own the property, the OR or Trustee will apply to Her Majesty's Land Registry for a Form J restriction. This records the Trustee's beneficial interest in the property and means that they must notify the Trustee of any dealings with the property.
You can still sell the property with your co-owner, but you'll have to pay the trustee their share.
The trustee's share is calculated on sale, based on your share of the sale, after any mortgage or loans secured on the property are paid off. Therefore, the trustees share may be valued differently when the property is sold than when you were declared bankrupt.
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If you're need to remove a bankruptcy restrictions order, we can help.
