The equity assessment
On sequestration, your beneficial interest in your home transfers to the Trustee. The Trustee's job is to realise value for creditors.
The Trustee will value the property, calculate the equity, and if there is significant equity in your share, work out how to realise it.
Options for realising equity
Sale: the most direct route where equity justifies it. The Trustee can seek to force sale, though courts consider the interests of non-bankrupt co-owners and any children.
Buy-out: a family member or co-owner buys out the Trustee's interest at a value roughly equal to the equity share.
Charge: the Trustee registers a security against the property equal to the equity share. Realised on eventual voluntary sale.
Jointly owned property
Only your share of equity transfers to the Trustee. The co-owner's share is untouched.
Sale requires either co-owner cooperation or a court order. Courts weigh the interests of the non-bankrupt co-owner and any dependents.
Negative equity properties
If your share of equity is nil or negative, the Trustee usually takes no action. Rising property values may prompt reassessment, but the practical effect is that negative equity homes are often protected.
The reversion time limit
If the Trustee has not dealt with your beneficial interest within a set period (usually 3 years, similar to English bankruptcy), the interest reverts to you.