The continuous accumulation of household debt risks makes rural families more financially vulnerable due to income constraints and inadequate social security.Against this background，the compensation for rural land expropriation，as an important exogenous shock driving the transformation of the asset structure of rural households，plays a key role in understanding the interaction between state land-based finance and household leverage.Based on the China Household Micro-Survey Data （CFPS） from 2010 to 2020，this paper systematically examines the influence pathways and heterogeneous effects of land compensation on the debt risk of rural households.The research finds that land expropriation compensation funds significantly increase household debt risks through three channels：short-term liquidity shock，asset structure adjustment and changes in expectation-driven behavior.Firstly，the short-term abundance of compensation funds induces household consumption upgrading，forcing households to rely on borrowing to maintain their consumption levels once the compensation funds are exhausted，thereby accelerating debt accumulation.Secondly，the loss of land assets leads to a reduction in household productive capital，and the ensuing adjustment in asset structure compels households to borrow to fill operational gaps.Finally，the compensation funds improve income expectations，encouraging households to expand long-term consumption and engage in high-risk investments，while also fueling competitive consumption，which heightens liquidity pressures.Heterogeneity analysis reveals that in heavily aging households，due to rigid medical expenditures，only mortgage debt responds significantly to the changes in compensation funds.Based on this，this paper proposes that a dynamic compensation mechanism needs to be established，the social security linkage policy strengthened，and the supporting measures for employment and skills training programs improved，in order to hedge against the systemic risks in the transformation of land-based finance.