NEW rules on bankruptcy could increase the risk of East Lancashire people who are declared insolvent losing their homes, according to the Association of Chartered Certified Accountants.
A reform in insolvency law means that trustees appointed to look after the estate of an individual who has been declared bankrupt must make a decision within three years of the order about whether the bankrupt's home should be sold to help repay creditors.
For anyone who was declared bankrupt before April 1 there was no time limit in force, which meant that even if they are discharged from bankruptcy, they could face a visit from the trustee at any time in the future who can then insist that their home is sold for the benefit of creditors.
The new law means that if the trustee does not choose to sell the bankrupt's home within three years of the bankruptcy order being made, the property reverts to the bankrupt and their home is safe.
Ilyas Patel, ACCA spokesperson for the North West said: "The effect of this change will be to concentrate the minds of trustees about what to do with bankrupts' homes as they will be aware that the clock starts ticking from the moment the bankruptcy order is made."
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