Bankruptcy while letting?

RRWJ

Hi all,

does anyone have experience of becoming bankrupt while being an assured-shorthold tenant? I know that it's discretionary grounds for the landlord to break the tenancy agreement and turf you out, but I wondered if anyone had gone BR while being an assured-shorthold tenant and how the landlord/agent reacted, and what happened generally!

Thanks in advance!

dubiousone

Your situation is why we ended up with an IVA instead of BR. However, it's a big price to pay having an IVA with no assets to protect just so LL is not informed. My advice to you is check your Tenancy contract and see if there is a IVA/BR clause in it. If there isn't then your OR may or may not inform your LL. My wife and I are going BR soon, there is no BR clause in contract but we have decided to have a chat to letting agent and let them know what we intend to do and state we would rather be honest. This may go in our favour or not, a risk we're willing to take. We haven't missed any payments, not likely to and have looked after the place as if it were our own.

What I am trying to say is if you're a good tenent, have been a good payer for several months, there's no clause and your up front and honest, you will probably not have a problem. If there's no clause in your contract then they can't turf you out for going BR, they are legally within right not to re-new contract though.

Houses aren't blacklisted so you going BR only affects your credit status not the next residents of your home. Some things to consider, could you put 6 months rent down or get a guarantore if there was a problem with you going BR? These may help you stay where you are.

Sorry for waffling but hope this helps.

notfes53

Told my landlord - by phone - on the day I went bankrupt.

He was fine. I've been a good tenant and have always paid on time, and looked after the property.

He couldn't have been nicer. He asked if there was anything he could do to help, and told me he went BR himself 20 years ago.

Be upfront, but don't decide on what's the right course of action (e.g. BR or IVA) based on your landlord's possible reaction. Just reassure him that you have submitted the amount of the rent to the Official Receiver and that the rent will be a protected part of your income. Also, the OR will write to your LL and may ask him to confirm your rent.

However, I'd be more cautious if I was in rent arrears - which I hope you're not! Talk to your LL and express your concerns and reassure them that you will continue to be the perfect tenant. I would NOT inform any letting agent unless it was the only way to get the message to the LL. Your contract is with the LL, not the agent.

RRWJ

@ both of you,

Thanks for the response.

Annoyingly there is the contract in the tenancy agreement that says she can boot us out of she likes, however it's my partner looking at going BR, and I pay the rent. It's DD out of my account early to account for cross-bank transfer, it comes out of my student loan, and we have a guarantor firmly in place.

His debt is from credit cards and loans, none of the debt is rent arrears.

I sounded the LL's daughter out on it because her daughter is more approachable than the LL is, and her daughter seemed to think there wouldn't be a problem. We're now thinking judging on an incident with the LL last week that she'll boot us out though. The lease renewal isn't an issue - we want out when this lease is over as we're in a one bed flat and we want to move to a bigger place.

I'm now wondering if people have experience of getting a private LL to take them on having gone BR??

Thanks for input

Mr_E_3

Is it not the case that you can ask the OR to not contact your LL? This is what I'm going to do, I've a letting agreement to show them my monthly rent and my bank statements clearly show my rent payments ....

Fortunately, I get on very well with the "Letting Agency" I rent through, been here for years and never missed a payment ... I'm apparently the best tenant they've had ... though I don't want to risk informing them, nor do I wish to expose myself as a BR ... less of a risk ...

Then again in this day and age I believe a lot of LL's are desperate for tenants ... and as I've read elsewhere on the forum the OR basically gaurantees you'll have money for rent ... whether or not you actually cough up is another matter ...

RRWJ

@ MR E

As far as I knew, the OR had to inform the LL to give them a chance to come forward to claim any debt if there is any. Which there isn't in my fella's case.

You've got me wondering now....

Mind you - now the LL is aware that the situation might be arising, won't she be looking out for it in the local news, because it'd be advertised in the local press wouldn't it?

Mr_E_3

Hi RRWJ,

I'm actually very good friends with my Letting Agency and have been for about 9 years (we share pipes if you know what I mean). They're not mainsteam. Fortunately the paper that prints names is not widely read and I can't imagine them going through it ... hippies

I'm sure they'd be fine about my BR, though I don't want to rock the boat. There is a clause in my tenancy agreement, though knowing them, I believe it's just a catch all. I'd just rather not let them get wind ... I'll ask my OR and if they say they will be in contact with my agency, I'll have a chat with them up front.

Mr E.

tigerfeet2006

The OR has an obligation to tell your LL. Most though are pretty good at not saying anything if you ask them nicely and say that you are up to date with the rent, They usually will want to look at your tenancy agreement.

The bankruptcy clause usually says may and not will. It is usually there for landlords to get tenants out who are bad payers and are behind in their rent which then goes into bankruptcy. I believe they have to give you 2 months notice to quit, which is normal for most things.

debt_doctor

Hi all,

I have never (and nor has any of my colleagues) ever heard of anyone being evicted from a private tenancy simply because they have gone BR.

In my opinion a BR clause in an assured shorthold tenancy ( which virtually all private lets are ) is utterly meaningless.
A LL under an AST can get rid of a tenant with two months notice for NO REASON AT ALL, so a BR clause gives not the slightest extra power to their elbow.

So long as you pay your rent and look after the place a LL would be plain daft to get rid of you to risk someone new.

Best

DD

RRWJ

@ debtdoctor

So if the OH wanted to declare, the LL would have to give us 2 months notice to quit (s 21 notice), or she'd keep us on for the duration of the term, by which point (september) he should be pretty much discharged all being well, and we could find a new house to rent as planned.

Seeing as we'd quite like to get out early because of the way the LL has treated us recently, but if we can't we're willing to stick here til the agreement is up, would you say it's a win/win situation for us?

Cos if it is, I'll be ordering him some papers from Brum Court tomorrow and getting him to register on here

Thanks for the help - you're a gem!