There are many questions that may arise in the mind of the debtor when it comes to bankruptcy. The bankruptcy lawyers or attorneys can help in this context.
If a debtor is declared bankrupt, there are certain events that might take place with respect to his home. A debtor may have to sell his home to pay off his debts. The bankruptcy lawyers or attorneys can help the debtor in determining take necessary measures to take. The trustee or Official Receiver can sell the home of the debtor for the purpose of repaying his debts. However, there are rules related to this action.
According to this process, if the spouse or children are residing with the debtor, then the sale might be postponed till the end of the initial year of bankruptcy. This gives them time to look for other housing. At the same time the spouse, relative, partner or a friend can purchase the beneficial interest of the debtor in his home. This might prevent the trustee or Official Receiver from selling the home afterward.
Another important factor is the beneficial interest that is transferred to the trustee or the Official Receiver. In case the house is under sole proprietorship, the legal title is also transferred to the trustee or Official Receiver. If the house is under joint proprietorship, the legal title is held by the co-proprietors. However, this does not stop the trustee or Official Receiver to take necessary steps concerned with the property.
It might happen that the trustee or Official Receiver can transfer the legal title and beneficial interest to the debtor, spouse,relative, partner or acquaintance. However, this is complex in nature. If the debtor wants to go ahead in this way, he should meet the trustee or Official Receiver for more information. In case the beneficial interest is not purchased by anybody, it is held by the trustee or Official Receiver. The debtor cannot get it back even if he has been cleared of bankruptcy. The rate of beneficial interest can go up as time goes on if the houses market value goes up.
Last Updated on : 10th July 2013