If you owe a lot of money in the UK, what assets can the creditor legally force you to sell to pay off the debts? For example, can they make you sell (or remortgage) your family home? What law is this covered by?


Ultimately, if they force you into bankruptcy, everything, except:

  • tools of your trade
  • household items (clothing, furniture), however, if these are worth significantly more than a replacement then they can be sold and you get given a replacement.

Short of this they can:

  • garnishee bank accounts
  • garnishee wages and other income
  • seize and sell personal property
  • acquire liens over real property

The cannot force you to borrow money pay them, however, this may be a better option than any of the above, particularly bankruptcy.

If you are in such a situation you should seek advice on how to best deal with it. Most creditors are willing to negotiate over amounts and timing: something latter on is better than nothing ever.

  • Literally "everything"? Under US bankruptcy law, some personal assets are by law excluded from bankruptcy, like equity in a personal residence up to a certain limit. Does UK law not have any similar provision? – Nate Eldredge Feb 7 '16 at 0:19
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    @Arnold as a last resort, the administrator in bankruptcy will sell the family home to pay creditors. Real property is an interest in land as opposed to personal property which is everything else. A lien over a property means that it cannot be dealt with (sold, transferred, leased etc.) without the lienholder's permission; they also have a claim on any sale proceeds. No, you do not need to be bankrupt to have property seized. – Dale M Feb 7 '16 at 7:33
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    @Arnold: Yes, they will (though it's a long process). You are, of course, free to find an accomodation to rent in that case. If you cannot afford the rent, you may be eligible for Housing Benefit. Look at it the other way: It's not the lender's fault that you bought a house you cannot pay - why should they bear the cost while you keep the house? – sleske Feb 8 '16 at 10:19
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    @dorothy if you can't pay your debts then somebody lent you money; the UK attitude is that paying them back is more important than you keeping a house. – Dale M Feb 9 '16 at 11:05
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    @dorothy loans are secured because making someone bankrupt is a long and torturous process. Foreclosing is (relatively) easier; slightly less long and torturous process. In addition you are a secured creditor and rank ahead of the unsecured creditors. – Dale M Feb 9 '16 at 19:21

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