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The Bankruptcy Service Case Study Example: Bankruptcy And Properties With Multiple Owners

The following bankruptcy case study is a fictitious example, designed to help you understand working situations where bankruptcy is and isn't appropriate.

Dealing with a property during a bankruptcy can be complicated when there are other vested interests in it.

Hello, I hope you can help me. I consider myself to be on the verge of bankruptcy. My obvious concern is my house, which is mortgaged jointly in my name and my wife’s name also. However, to complicate matters further, my mother also lives in the house, and I was wondering if she has any claim on equity on the property, as she lives in an annex that she herself paid for.

Hi. First things, first. Bankruptcy is a big step, and before deciding if it is the correct path for you, if you haven’t already then seek further advice. Feel free to contact us on 0800 043 6260, for impartial, advert advice – numerous debt solutions are available nowadays, depending on your personal situation.
On the presumption that your mother is not on the deeds of the house, she may still have a beneficial interest in the house because of her financial input to the annex. If you decide to go bankrupt, your case will be handled by an official receiver, who will assess what assets can be considered part of your bankruptcy estate, to help pay off creditors. If the house deeds show ownership split between you and your wife, then your 50% would transfer to the official receiver who would try and release it, perhaps by selling the house.
Because of your annex, the receiver might decide your interest is thus not 50%, but it is up to you and your mother to persuade him or her of this. I would naturally seek further advice on the matter before declaring bankruptcy.

For more details on bankruptcy and properties, see my section on bankruptcy & your home.

Free debt counselling and advice is also available from the Money Advice Service available at: doesn't charge a fee for its bankruptcy service, but receives remuneration from the partners that we work with in order to keep operating. Those partners must charge a fee to the customer to likewise cover operational costs, and this amount will vary depending on the solution offered, and the terms of the parner. For details of these terms, please refer to the website of the organisation dealing with your bankruptcy. Upon application with, we will forward your information on to one of our specialist debt partners. You will then be contacted, and you will be able to explain your case, and expert advice will be offered in order to ascertain the most appropriate debt solution.