Discharged bankrupts from as long ago as the 1980s may still have to repay their debts - even if it means having to sell their houses.
Alan Robbins, part of the civil litigation department at Leamington solicitors Blythe Liggins, said high property values had caused the insolvency service to review literally thousands of cases of discharged bankrupts.
He said: "Because of the slump in property prices during the 1980s, some bankrupts had little or even negative equity in their homes and the official receiver often decided that it was not economic to realise the asset. However, now that house prices have soared, they are reviewing those cases."
At that time, a bankrupt usually qualified for a dis-charge after three years. However, unless all the debts have been paid, their assets still remain vested in the official receiver on behalf of the creditors.
Now the Insolvency Service has set up a special Protracted Realisations Department specifically for the purpose of reviewing every bankruptcy order where a house was involved and, in some cases, insolvency practitioners are being appointed to sell the houses unless they pay up.
"A lot of discharged bankrupts are likely to receive a notice, probably within the next twelve to eighteen months," said Mr Robbins.
"But they must not panic; there are a number of ways of solving the problem without them losing their home.
"It will obviously involve some payment to buy back their share of the equitable interest in the property, the value of which will depend on the present value of the property and any mortgages or other loans secured on it.
"But, there are other factors to be taken into account, so it may not be as much as they fear," he added.
"They will have ample time to obtain their own valuations and to seek advice."
