Can I Sell My House in Scotland If I Am Sequestrated or in a Trust Deed?

If you have been made bankrupt in Scotland, or you have signed a protected trust deed, your home is often the first thing on your mind. You may want to sell it to draw a line under everything, keep it for your family, or simply understand who now has the final say over it.

Scottish insolvency law has its own rules for the family home. This guide explains what your trustee can and cannot do, and where a quick cash sale can genuinely help.

The short answer is no, not on your own, but the house can still be sold. Once you are sequestrated, your interest in your home passes to your trustee, so only the trustee can sell it, with your family’s consent or the sheriff’s authority. In a protected trust deed, the trustee controls any equity, and you normally either pay it in or agree a sale. Either way, a sale is possible; it simply has to be done with the trustee.

What happens to my house when I am sequestrated in Scotland?

Sequestration is the Scottish word for bankruptcy, and it is governed by the Bankruptcy (Scotland) Act 2016. Under section 78 of that Act, the whole of your estate vests in your trustee as at the date of sequestration. Your share of your home, whether you own it outright or jointly, is part of that estate.

Your name usually stays on the title sheet for now, but the right to deal with the property sits with the trustee. What interests the trustee is the equity: the amount left after the mortgage and other secured loans are paid. What happens next depends on how much equity there is, who lives in the house, and whether your family can reach an agreement with the trustee.

Who is my trustee and how does the Register of Inhibitions affect a sale?

If you applied for your own bankruptcy, the Accountant in Bankruptcy (AiB) usually acts as your trustee unless an insolvency practitioner was nominated. If a creditor petitioned the sheriff court, the trustee is often a private insolvency practitioner. Either way, the trustee has the same powers over your home.

Once sequestration is awarded, a certified copy of the award is recorded in the Register of Inhibitions. Under section 26 of the 2016 Act this has the effect of an inhibition over all your heritable property for 3 years, renewable by the trustee. Any buyer’s solicitor will find the entry, so a private sale behind the trustee’s back is not possible.

If you have other debts registered against you, such as an inhibition from a creditor, our guide to inhibitions and charging orders when selling in Scotland explains how those work outside a bankruptcy.

Can my trustee sell the family home without my consent?

Not without going through a protective process. Section 113 of the Bankruptcy (Scotland) Act 2016 says that before a trustee in sequestration, or a trustee under a trust deed, sells or disposes of any interest in your family home, they must get the “relevant consent”. If they cannot get it, they must apply to the sheriff for authority.

The relevant consent comes from your spouse or civil partner (or former spouse or civil partner) if they live in the home, whether or not you still do. If no spouse or partner lives there but you live there with a child of the family, your own consent is needed.

What the sheriff takes into account

If the trustee applies to court, or raises an action for division and sale or for vacant possession, the sheriff must have regard to all the circumstances, including:

• the needs and financial resources of your spouse, civil partner or former partner;
• the needs and financial resources of any child of the family;
• the interests of your creditors; and
• how long the property has been used as a home by those people.

The sheriff can refuse, postpone for up to 3 years, or grant with conditions. Citizens Advice Scotland notes refusal or a long delay is most likely in special circumstances, such as a disabled child in a specially adapted house. If you are separated, our guide to selling your house during a divorce covers the wider picture, and our new guide on selling without your spouse’s or partner’s consent explains occupancy rights.

What is the three year rule for the family home?

Section 112 of the 2016 Act gives families some certainty. If your sequestrated estate includes an interest in your family home, that interest stops being part of the estate at the end of 3 years beginning with the date of sequestration, and it reverts to you automatically, without any disposition or other transfer.

Reversion does not happen if, within those 3 years, the trustee has taken one of the steps listed in section 112, which include:

1. sold or otherwise realised the interest, or concluded missives for its sale;
2. sent a memorandum to the Keeper of the Register of Inhibitions to renew the inhibition;
3. completed title in the Land Register or the Register of Sasines;
4. started proceedings for the sheriff’s authority to sell, an action for division and sale, or an action for vacant possession;
5. made a written agreement with you under which you take on a set liability to the estate in return for the interest; or
6. started a court action challenging an earlier transfer of the property for less than its value.

Can I or my family buy back the trustee’s interest?

Yes, and this is how many sequestrations involving a home are settled in practice. The trustee is interested in the value of your equity, not in the bricks and mortar. If someone pays a fair figure for that equity, the trustee can release the interest and the house stays with the family.

Section 112(4) of the Act specifically allows an agreement between you and the trustee under which you take on a specified liability to the estate, and in return the interest in the home leaves the sequestrated estate and reverts to you. Common ways of funding a buy out include:

• a payment from a spouse, partner or co-owner who is not bankrupt;
• a gift or loan from a relative or friend;
• a co-owner increasing their own borrowing to buy out your half share; or
• instalments agreed with the trustee, where they are willing to accept them.

The trustee will want a valuation or Home Report to work out the equity, so get your own figures before agreeing a number.

What happens to my mortgage and standard security?

Sequestration does not wipe out your lender’s standard security. The lender is a secured creditor, so it is paid from the sale proceeds first, before the trustee sees anything. Your trustee only ever gets the equity left after secured lending.

Mortgage payments still need to be made if you want to stay in the home. If the payments stop, the lender can still enforce its security and seek repossession, regardless of the bankruptcy. If that is a risk, read our guide on what happens if your home is repossessed and whether you can sell beforehand. Second charge lenders are in the same position, and our guide to selling a house with an outstanding secured loan explains how these are cleared on a sale.

What if my house is in negative equity?

If you owe more on the mortgage than the house is worth, there is nothing for the trustee to realise for creditors. In that situation trustees commonly abandon or release their interest, sometimes for a modest payment to cover costs, rather than spend money on a sale that produces nothing.

A trustee may still keep the interest alive if prices could recover. Our guides to selling a house in negative equity in Scotland and what happens if your sale price is less than your mortgage go into more detail.

What if I own the house jointly with a partner who is not bankrupt?

Only your share vests in the trustee. If you own the house in equal shares, the trustee steps into your half, and your co-owner keeps theirs. The trustee usually offers your share to the co-owner first, and if they cannot or will not buy it, the trustee may raise an action for division and sale in the sheriff court.

For a family home the section 113 protections still apply, and selling both shares together by agreement is usually cleaner than a court action. Our guide on whether one owner can sell a jointly owned property in Scotland explains the general rules on division and sale.

What happens to my home in a protected trust deed?

A protected trust deed is a voluntary arrangement in which you transfer your estate to a trustee, who must be a qualified insolvency practitioner. You normally pay contributions for 4 years, and once it becomes protected your creditors cannot pursue you for most of those debts. Citizens Advice Scotland’s guide to trust deeds suggests they are generally for people with debts of around £5,000 or more.

Your home is dealt with in one of three main ways:

• Excluded. If you have little or no equity, you may be able to grant a protected trust deed that excludes your main home, provided the trustee obtains a valuation and your secured lender agrees not to claim in the trust deed.
• Equity paid in. Where there is some equity but not enough to justify a sale, the trustee can agree that you, or a third party such as a relative, pay the value of the equity in. This often means extra payments, which can extend the trust deed beyond 4 years.
• Remortgage or sale. Where the equity is larger, the trustee may ask you to remortgage, which lenders are often reluctant to offer during insolvency. If that fails, a sale may be needed, with the section 113 protections applying.

How do sequestration, a trust deed and DAS compare for my home?

This is a simplified summary; your outcome depends on your equity and household.

Issue	Sequestration	Protected trust deed	Debt Arrangement Scheme
Who controls the home	Your trustee (AiB or an insolvency practitioner)	Your trustee, unless the home is excluded	You do
Can you sell it yourself	No, only the trustee can	Only with the trustee’s agreement if included	Yes, but tell your DAS adviser, as your programme may need to change
Equity	Goes to creditors, or bought out	Paid in, released by remortgage or sale, or excluded	Not taken; you repay debts from income
Family protection	Section 113 consent or court authority	Section 113 consent or court authority	Not needed
Typical length	Discharge usually after 12 months; contributions up to 4 years	Usually 4 years, sometimes longer	As long as needed to repay in full
Recorded against you	Register of Inhibitions and Register of Insolvencies	Register of Insolvencies	DAS register

Can I use the Minimal Asset Process or DAS and keep my home?

The Minimal Asset Process (MAP) is a quicker, simpler form of bankruptcy for people with low income and few assets. According to mygov.scot, you can only use MAP if you owe less than £25,000, have no spare income, own no property or land, have total assets of no more than £2,000 and no single asset worth more than £1,000 (a vehicle you need, worth up to £3,000, is ignored). Homeowners therefore go through full administration bankruptcy instead.

Proposed regulations published in 2026 would raise several of the MAP limits from 1 April 2027 if the Scottish Parliament approves them. These changes were not in force at the time of writing, so check the current position with a money adviser before you apply.

The Debt Arrangement Scheme (DAS) is different. You repay your debts through a debt payment programme set up by an approved money adviser, and while it runs creditors cannot take you to court, make you bankrupt or add interest and charges. Nothing passes to a trustee, so DAS often suits homeowners who can afford regular payments. Our guide on whether selling your house to pay off debt can help looks at that wider decision.

Have the 2024 and 2025 changes affected my home?

The Bankruptcy and Diligence (Scotland) Act 2024 received Royal Assent on 15 July 2024. The AiB reports that some sections came into force on 20 January 2025 and others on 25 June 2025, mostly technical amendments to the 2016 Act and changes to diligence.

The headline measure, a mental health moratorium protecting people in certain mental health treatment from creditor action, had not been brought into force at the time of writing. None of these changes alter the family home rules in sections 112 and 113.

How does a buyer purchase a house from a trustee?

When a trustee sells, the trustee is the seller and instructs the solicitor. The buyer’s solicitor will check the trustee’s appointment and the entry in the Register of Inhibitions, and the trustee will either complete title in their own name or sign the disposition using the powers in the 2016 Act. Our guide to the role of the Land Register of Scotland explains how title passes on registration.

Trustees have never lived in the property and know little about its history, so they usually sell strictly as seen. Expect limited warranties in the missives, limited answers on the property questionnaire, and a disposition with restricted warrandice. Some buyers and lenders are wary of that, which is one reason trustee sales can attract fewer offers on the open market.

The trustee also has a duty to creditors to obtain fair value, so they will usually compare any offer with an independent valuation or with open marketing. A trustee may still prefer a certain, unconditional offer with a date of entry that suits them over a higher figure that depends on a mortgage, a chain or a closing date. Our new guide on whether you have to set a closing date explains how that system works.

Can I sell my house before I apply for bankruptcy or a trust deed?

Yes. Until you are sequestrated or grant a trust deed, the house is still yours to sell, and a sale at a fair market price to clear debts can sometimes avoid formal insolvency altogether. That is a decision to make with an adviser, because the timing matters.

What you must not do is give the house away, transfer it to a relative for less than it is worth, or use the proceeds to pay one creditor ahead of others just before going bankrupt. A trustee can ask the court to reverse transfers for less than full value and unfair preferences. If you have tax or council debts too, our guide to selling with council tax arrears may help.

How can a cash sale help, and when is it not the right answer?

A cash buyer can be a practical option in several situations connected with insolvency. Because there is no mortgage involved, there is no lender valuation or approval to wait for, the property can be bought as seen, and the date of entry can be agreed to suit everyone. You can read more about how our process works and how property buying companies are regulated in Scotland.

A cash sale can suit you when:

• you are not yet in formal insolvency and a sale at a fair price would clear your debts;
• your trust deed requires you to release equity and remortgaging is not available;
• you, your partner and the trustee all agree that a sale is the sensible outcome and want it done without a long marketing period; or
• the property needs work or is otherwise hard to sell on the open market.

It may not suit you if a relative could buy out the trustee’s interest, if DAS would let you keep the home, or if the house would sell quickly on the open market. Cash buyers usually offer below full market value in return for speed and certainty, as explained in our guide on why cash buyers pay less. In a sequestration, any offer goes to your trustee, who decides whether to accept it.

Every insolvency is different, so speak to a solicitor, an approved money adviser or your insolvency practitioner before you agree anything about your home. We buy across the country, from Glasgow to the Highlands.

Frequently asked questions

Do I lose my house as soon as I am sequestrated?

No. Your interest vests in the trustee straight away, but you can usually stay while the trustee decides how to deal with it.

Does the house come back to me when I am discharged?

Not automatically. Discharge from the debts usually happens after 12 months, or 6 months in MAP, but your interest in the home stays with the trustee until it is sold, released by agreement, or reverts under the three year rule.

Can my trustee force my partner and children out?

Only after getting the relevant consent or the sheriff’s authority. The sheriff must consider the needs of your partner and children, and can refuse the sale, attach conditions or delay it for up to 3 years.

Can my parents buy my house from the trustee?

Yes. A relative can pay the trustee for your share of the equity, or buy the whole property, as long as the price is fair. The trustee will want evidence of value before agreeing.

Do I still have to pay my mortgage while I am bankrupt?

If you want to keep living there, yes. Your lender’s standard security is unaffected by the sequestration, and the lender can still seek repossession if payments stop.

Can I sell my house while I am in a trust deed?

Only with your trustee’s agreement if the home is included. The trustee will want the equity from the sale paid into the trust deed, and you will need to agree how the proceeds are split before missives are concluded.