The car is on the drive, the pension statement is in a drawer, and the house has your name on the deeds. Which of those survives bankruptcy is the question that keeps people awake.
Short answer. In England and Wales you usually keep a car you need for work or household needs, money already paid into a UK pension, and basic household items. Your home is at risk only for your share of the equity (what it is worth minus the mortgage), and only if the equity is more than £1,000. Free advice: StepChange on 0800 138 1111.
The rules below come from GOV.UK, National Debtline and Citizens Advice, checked October 2026. The official receiver decides in your case, so treat this as the general picture. For the process and the £680 fee, see our guide on how bankruptcy works in the UK.
At a glance
| What you own | Usual outcome | What decides it |
|---|---|---|
| Home | Your equity can be sold or charged | Equity above £1,000 |
| Car | Kept if needed for work or essential household needs | How much it is worth |
| Pension | Money already paid in is usually kept | Approved or unapproved, and recent large payments |
| Clothes, bedding, furniture, household items | Kept | Basic domestic needs |
| Wages | You may pay from spare income for up to 3 years | What is left after essentials |
Your home: it is the equity that counts
Equity is simply what your home is worth minus what you still owe on secured debts like the mortgage. GOV.UK says the trustee, the person dealing with your bankruptcy, might sell your family home depending on how much equity is left. If your equity is more than £1,000, the trustee can either sell the property or apply for a charging order, which fixes the amount the trustee will get if you sell later. If the trustee has not started to deal with the home within 3 years, it will usually be transferred back to you.
| If you are… | What GOV.UK says happens |
|---|---|
| The sole owner | Legal ownership of the home, with the equity, passes to the trustee. A restriction is added to the land register and you cannot sell the home. |
| A joint owner | Your equity passes to the trustee but you still own the property with the other owner. A Form J restriction tells the trustee about any dealings, such as a sale. |
| Not an owner at all (for example your partner owns it) | The Form J restriction can be removed if the owner sends HM Land Registry a signed statement that they are not the bankrupt person. |
| A tenant | Your landlord might be told. It is unlikely you will be asked to leave if you are up to date with your rent. |
You might be able to stop a sale if the equity or legal title can be sold to someone else, such as a partner, and the sale can be delayed for up to 1 year if you need to organise somewhere for children or a partner to live. Keep paying the mortgage throughout, because a mortgage is a secured debt that bankruptcy does not wipe out.
A worked example: £30,000 of equity, shared two ways
This is our own illustration, not a real case. Priya and her partner own a home worth £200,000 with £170,000 left on the mortgage. Equity is £30,000. They own it 50/50, so Priya’s share is £15,000. Priya goes bankrupt. Her partner’s half is a separate matter.
| Step | Amount |
|---|---|
| Home value | £200,000 |
| Mortgage left | £170,000 |
| Total equity | £30,000 |
| Priya’s 50% share | £15,000 |
| Share that could be dealt with | £15,000 (over the £1,000 line) |
Whether the £1,000 line applies to the whole equity or to your share can matter in a smaller case, so ask the trustee which they use. Here it does not: £30,000 in total and £15,000 for Priya are both well over £1,000. So her half could be sold or charged, or her partner could buy it. Selling costs and the mortgage lender’s rights can change the sums, so the trustee should give a real figure. After 3 years without action, the home usually passes back.
Your car and tools: need beats value
GOV.UK says you can usually keep things you need for your job, like tools or a vehicle, and essential household items such as clothing, bedding and furniture. If you own a vehicle and other transport is not practical, you can usually keep it to meet your household’s basic needs, care for someone else such as a disabled relative, or do your job.
Value matters too. You might have to give up an item, including a vehicle, if it is worth more than a reasonable replacement. The trustee then either uses the sale money to buy you a cheaper one or gives you the money to buy one, and any money left goes towards the bankruptcy.
| Car situation | What GOV.UK says |
|---|---|
| You own it and need it for work, household needs or care | Usually kept |
| You own it and it is worth more than a reasonable replacement | May be sold and replaced with a cheaper one |
| On hire purchase, conditional sale or lease, worth more than is left to pay | The trustee might sell it, and cannot replace it with a cheaper one |
| On finance and not sold | The finance company could take it back or let you or someone else take over the agreement |
The practical point is to be ready to explain why you need it. Write the reason down before the interview: the commute, the shifts when no bus runs, the school drop.
Your pension: the part people get wrong
GOV.UK says that after you are made bankrupt you can usually keep any money you have previously put into a UK pension, and speak to your trustee or a debt adviser about how it affects yours. Pension payments you are already receiving usually count as income. National Debtline adds that approved pensions are usually unaffected, and says you cannot be forced to draw a pension, and you usually cannot draw one before age 55. The risk is with unapproved pensions, and with very large contributions made shortly before bankruptcy, which can be challenged. If you have put extra money into a pension while falling behind, mention it to an adviser before you apply.
Everyday items and your wages
Clothing, bedding, furniture and household equipment for basic domestic needs are exempt, so the sofa and the bed stay. Your wages are different. Surplus income above £20 a month is usually payable, through an income payments agreement that lasts about 3 years. If your only income is state benefits, there is no income payments agreement.
Debts that are not covered, such as some secured or priority debts, can still bring collection action. Our guide on whether bailiffs can enter your home explains what bailiffs can and cannot do.
Your bank account and the debts you keep
The bank will usually freeze your accounts, and your trustee can ask it to release money you urgently need. Debts that are not wiped out include fraud debts, student loans, a mortgage if you keep the home, and DWP budgeting or crisis loans. Our guide on how bankruptcy works has the full list.
What to do before you apply
List what you own and what each item is worth. Note the equity in your home and who owns what share. Write down why you need the car. Then ring StepChange or National Debtline before paying the £680, because a different route, such as a DRO or IVA, may protect more of what you own.
Questions people ask at 2am
Will I lose my house if I go bankrupt?
Not automatically. If your equity is more than £1,000 the trustee can sell the home or apply for a charging order. The sale can be stopped if someone such as a partner buys the equity, and delayed for up to 1 year if you need to arrange somewhere for children or a partner to live. If the trustee has not acted within 3 years, the home usually passes back to you.
Can I keep my car?
Usually yes if other transport is not practical and you need it for work, household needs or caring. If it is worth more than a reasonable replacement it can be sold and replaced with a cheaper one. A car on hire purchase or lease follows different rules and cannot be swapped for a cheaper one.
Is my pension safe?
GOV.UK says you can usually keep money you have previously paid into a UK pension. National Debtline adds that unapproved pensions may be at risk and very large contributions made before bankruptcy may be challenged. Pension payments you are already receiving usually count as income.
What if my partner owns the house with me?
Your equity passes to the trustee but you still own the property with the other owner, and a Form J restriction tells the trustee about any sale. If you are not an owner, your partner can ask HM Land Registry to remove it with a signed statement.
What can I definitely keep?
Clothing, bedding, furniture and household equipment you need for basic domestic life are exempt.
Do I keep my wages?
You keep what you need for essentials and reasonable living costs. Surplus above about £20 a month is usually payable under an income payments agreement for up to 3 years.
More UK help: how to pay off debt.
Disclaimer: DebtShift is an educational platform operated by H Ali Logistics Ltd, which is not authorised or regulated by the Financial Conduct Authority (FCA). This article is general education, not financial or legal advice. For free, impartial debt advice, contact StepChange on 0800 138 1111.
Sources
- GOV.UK, Becoming bankrupt: your home, possessions, money and income
- National Debtline, Bankruptcy (England and Wales)
- StepChange, Bankruptcy
- Citizens Advice, Paying towards your debts after you go bankrupt
Last reviewed October 2026
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