Can your mobile home, where it is your only home, be taken off you and sold if you are made bankrupt?

Mobile homes in Scots Law are quite strange in that unlike other homes, those built with bricks and mortar, they can be moved. So they are classified as moveable property, whereas those built on land are known as heritable property, or immoveable property.

Moveable Property and Sequestration (Bankruptcy)

The general rule in Scots Law on bankruptcy is all moveable assets vest or belong to your trustee when you are declared bankrupt. This means they get an interest in them. However, there are some exceptions to this rule.

The exceptions to this rule is if a  Sheriff Officer cannot take the property using an Attachment Order, then if your are made bankrupt, your insolvency practitioner cannot take that property either.  So an insolvency practitioner cannot take your cooker, your settee etc.

For a full list of what Sheriff Officers cannot take using an Attachment Order see What can Sheriff Officers take?

How do Mobile Homes differ?

Mobile homes are an exception to this rule, however.

The starting point is the Bankruptcy (Scotland) Act 2016.  It states:

Section 88 Limitation on vesting

(1) The following property of the debtor does not vest in the trustee in the sequestration—

    (a) any property—

         (i) kept outside a dwellinghouse, and

        (ii) in respect of which attachment is, by virtue of section 11(1) of the 2002 Act, incompetent,

Section 11 (1) of the Debt Arrangement and Attachment (Scotland) Act 2002 (2002 Act) states:

Section 11 Articles exempt from attachment

(1) It is not competent to attach 

(c) A mobile home which is a debtor’s only or principal residence

However, section 45 of the 2002 Act also states:

45 Interpretation of this Part 2, 3 and 4

In this Part and in Parts 3 and 4 of this Act—

“dwellinghouse” does not include—

(a) a garage, even although it forms part of the structure or building which consists of or includes the dwellinghouse; or

(b) other structures or buildings used in connection with the dwellinghouse,

      but does include a mobile home or other place used as a dwelling;

“mobile home” means a caravan, houseboat or othe moveable structure used as a dwelling;

So, although it is not possible for a Sheriff Officer to attach a mobile home which is someone’s permanent or only home; in a bankruptcy, the property does vest with the Trustee, that is they obtain an interest in it, and it can be sold.

The reason for this is because section 88 of the Bankruptcy (Scotland) Act 2016 states only property kept outside the dwellinghouse that cannot be attached by a Sheriff Officer, does not vest with the Trustee in Bankruptcy.

Section 45 of the Debt Arrangement and Attachment (Scotland) Act 2002, makes it clear that a mobile home can be a dwellinghouse, so it cannot be property kept outside the dwellinghouse.

What does the 2002 Act attempt to do?

In essence what the 2002 Act tries to do is to elevate the status of someone’s home, where it is a mobile home, to the status of  being immoveable property and protect it from an Attachment Order. Attachment Orders can only be used against moveable property.

So, in the same way a Sheriff Officer cannot come and use an Attachment Order to sell your bricks and mortar home, they cannot do it with a mobile home.

However, like with a bricks and mortar home, mobile homes do vest with Trustees in Bankruptcy and can be sold for the benefit of creditors.

The consumer, however, does have the same protections in relation to their family home, where it is a mobile home, that they would have if it were a house built with bricks and mortar.