Selling your house to clear debt: bankruptcy, IVAs and charging orders

Yes. If your home is worth more than the mortgage and anything else secured on it, selling turns that difference into cash, and that cash can clear your other debts in one step. The mortgage and any charges come out of the sale money first, and the balance is yours. Get free debt advice before you decide, because a less drastic option may fit. If you owe more than the house is worth, your lender has to agree a shortfall arrangement before you can sell.

It depends on your equity. If you have real equity, selling on your own terms and clearing the debt can leave you far better off. In bankruptcy a trustee takes control of your share of the home and can sell it to pay creditors. If you have little or no equity, bankruptcy may be the cleaner route. A free adviser at StepChange or National Debtline will run that calculation with you.

A charging order secures an unsecured debt against your home after a creditor obtains a County Court Judgment, under the Charging Orders Act 1979. You can still sell, but the charged debt must be paid from the sale proceeds at completion, alongside your mortgage. Acting before the creditor applies for an order for sale keeps you in control of price and timing.

Potentially, but it's a last resort. A creditor with a final charging order can ask the court for an order for sale. Courts don't like forcing a sale over a debt that's small next to the value of the home, and often refuse. Selling before it gets that far is almost always calmer and better value than a court-driven sale. A debt adviser can also tell you whether the debt or the charge can be challenged first.

Usually not. An IVA is built to help you keep your home where possible. Most IVAs include an equity release clause near the end, asking you to try to remortgage and put some equity into the arrangement. If you can't remortgage, the term is usually extended by about a year instead of the house being sold. A free adviser can help you compare an IVA against selling and clearing the debt outright.

The mortgage and any secured charges are paid off first. What's left is yours to settle your other debts, and anything still there after that you keep. With a cash sale you get less than a good open-market sale would achieve. That's the trade-off for speed and certainty. There's no set percentage. We price each property on what it is and on what you tell us, so ask us for a figure and weigh it against what an agent thinks they could get. An agent may get you more, but the sale is slower and less certain.

Completion normally takes 7 to 28 days once a solicitor is instructed, and the fastest cases go through in 7. Our offer stands for 14 days. If a debt is secured on the house, or you're in negative equity, expect longer, because the lender or charge-holder has to consent. We'll tell you honestly whether the timing really works for your hearing date.

Selling your home to clear a debt in full is far better for your credit than defaulting, bankruptcy or a possession order. Bankruptcy, an IVA and most serious credit markers stay on your file for six years. Clearing a debt from a sale before it escalates avoids the heaviest markers. A free debt adviser can explain how each option would show on your file before you decide.

StepChange on 0800 138 1111 (Monday to Friday 8am to 8pm, Saturday 8am to 4pm), National Debtline on 0808 808 4000 (Monday to Friday 9am to 8pm), Citizens Advice on 0800 144 8848, and MoneyHelper on 0800 138 7777. All are free and independent, with local Citizens Advice offices in Sheffield, Doncaster, Rotherham and Barnsley.

No, bailiffs can't take your home. They can call round to take goods. A house can only be sold to pay a debt through the courts, usually a charging order first and then an order for sale, which judges treat as a last resort. If bailiffs are at your door, ring National Debtline free on 0808 808 4000. Knowing the real risk stops you making a rushed decision.

Sort that out before you sell, not after. Selling your home by choice can count as making yourself homeless on purpose, which may limit what your council has to do for you. Speak to your council housing team and to Shelter before you commit to anything. If you do go ahead with us, we can set the completion date to suit you, so you aren't out before you have somewhere to go.

It can, yes. Money sitting in your bank counts as savings for means-tested help like Universal Credit and Housing Benefit, and above a certain level your payments drop or stop altogether. Money from a house sale is treated the same way. Check the current savings limits on GOV.UK, or ring Citizens Advice on 0800 144 8848, before you sell. It catches people out, and it is easy to plan around once you know.

No. If you both own the house, you both have to agree and both sign. If your ex won't co-operate, a court can be asked to order the sale, which costs time and money, so get a solicitor involved early. If the debt is only in your name, a free adviser can also check whether the creditor can reach a jointly owned home at all before you push for a sale.

No, not on your own. Once you are bankrupt, your share of the home passes to the Official Receiver or a trustee, and they control any sale of it. You can still talk to them about the best way to deal with the property, and a partner or family member may be able to buy your share so the home is kept. Any buyer, us included, would have to deal with the trustee.

No, ignoring it makes things worse. If you don't reply, the court can decide against you without hearing your side, and the creditor can then apply to secure that debt on your home. Answering, even to say you can't pay, keeps your options open. Ring National Debtline on 0808 808 4000 or Citizens Advice on 0800 144 8848 today, and take the letter with you to any appointment.

Nothing. There are no fees to you, no estate agent bills and no viewings to pay for. We can cover your legal fees if you use our panel solicitor. You can use your own solicitor instead if you prefer, and you'd pay their bill in that case. The real cost is in the price. A cash sale will normally be below what a good estate agent could get on the open market. We don't work to a percentage, so we price yours on what it is and on what you tell us.

The figure we give you is our best offer at that point. We don't open low and creep up, and we won't cut the price because you're under pressure. We put the offer in writing the same day and it stands for 14 days. It's based on what you tell us. If something serious turns up in the legal work, like a title problem or major structural damage, the price may have to change, and we'll show you exactly why. A buyer who cuts the price for no reason isn't worth dealing with.

Only if your lender agrees. Where the sale won't clear the mortgage, the lender has to accept a shortfall arrangement before anything can complete, and the money still owed afterwards stays your debt. That takes extra time and it isn't a clean fix. Ring StepChange free on 0800 138 1111 first, because in negative equity there are often better options than selling.

Possibly, and we would rather tell you than take the sale. Selling your home is a big decision you can't undo, and for a lot of people a debt management plan or an IVA deals with card and loan debt without having to sell the house. Selling makes most sense when you have real equity and a creditor is closing in. Let StepChange run your numbers on 0800 138 1111 first.

A sale to us is quiet: no board outside, no advert and no stream of viewers through your home. We can't promise total secrecy though, and no honest buyer can. The sale and the price go on the Land Registry record and become public in time, and your solicitor has to deal with any debts registered against the property. What we won't do is discuss your reasons with anyone else.