Bankruptcy Check

If you are buying a property with a mortgage, remortgaging or transferring equity, your solicitor will carry out a bankruptcy check.

The mortgage lender will require your solicitor to carry out the bankruptcy check in order to check whether you (or the person being added to the mortgage) are bankrupt, or about to become bankrupt. This check ensures that the mortgage lender's loan is secure.

The check occurs just before the mortgage is completed, and the timing is important.

If, by some chance, a notice of bankruptcy was registered before the mortgage completed, then the lender would lose their priority interest over the property. The lender would not be able to benefit first from the sale of the property to settle the bankrupt owner's debts, and would instead have to "wait in line" with all the other creditors.

Helen Goddard, Legal researcher

Helen Goddard, Legal researcher