Educated guess. Because KP was made bankrupt, the trustee in bankruptcy put a restriction on it which means that the property cannot be sold without consent of the trustee. I am also guessing that the bankruptcy put a halt to any repossession proceedings the bank may have been taking.
The trustee in bankruptcy will look at the assets to see if any of them would raise funds to pay creditors if sold. It would appear that there is not much equity in the house as the trustee has not sold the house. However, if KP has not been cooperating (and we know that she has not) this has slowed the entire process down. I strongly suspect that the trustee will remove the restriction on the property which will allow the bank to apply for a repossession order, which in effect, removes the house as an asset from the bankruptcy estate. The bank need to be paid first and if there is any money left over would be handed over to the trustee to go towards paying creditors (there is a second charge on the property, so that will need paying as well).
I do not think the trustee would rent the property out as the rent may not be enough to pay the mortgage and the creditors.
On the slim chance that the mortgage payments are up to date, and all arrears have been paid, AND there is no equity in the house, then I can see KP renting the house out, but it would need to cover the mortgage and any maintenance the property may need.
It would be helpful to know how much of a mortgage she took out on the property, what the proper value of the property is now and whether there are any arrears. Without that information, everything else is guess work.
Keiran and PTMe are victims, and many others along the way.