HELP!! Tenant gone bankrupt

samjocky

Morning Everyone

My tenant who has been no trouble at all the last 12 months, has gone bankrupt in his business. He assures me that the Courts will allow him his living costs , ie my rent money, so in theory I should be okay. is this true? His wife has opened up a bank account in her own name and the rent will be paid from there. He has since been taken on as a PAYE employee with a major national firm with a wage of £45K (so he tells me). But the bankruptcy process is going through the courts and I am just so worried that I might lose out! Is this true - will the court allow him the rent money to be paid before he has to think about repaying other debts?

Grateful to all who reply

Sam

samjocky

ts_aly2000 wrote:

Hello :-)

You should be ok (my partner is BC so can comment on this). You will indeed receive your rent, and it's a sign of goodwill that there aren't any arrears, if they had wanted to be difficult then trust me they could have been with no comeback. The OR (Official Receiver) controls all income. With this £45k being brandished about he's going to be paying a fair whack of that to the OR. After the normal living expenses (which includes you) something like 70% of the remainder is seized.

Erm, bankcruptcy process going through courts eh!? Well he's either BC or he isn't, there's no inbetween. The process takes in the reigon of an hour to complete. Unless of course he's being threatened with BC by someone like the Inland Revenue.

The court doesn't decide if rent money is paid to you or not, the Official Receiver decides this, who is a representative of Her Majesty's inspectors. OR's have very wide ranging powers akin to Customs and Excise, who themselves have more power than the Police to investigate.

You will be paid your rent, don't worry about that :-) BC is nothing more that protection by the courts from your creditors, it usually comes about as the companies who are owed money become so abusive, rude, and underhand, that BC makes it a serious offence for them to chase the debtor. To bring it into perspective, an OR will have Directors of a company like the Halifax hauled into court, as the courts don't recognise clerks or managers as being responsible for the company's actions. Hence, the debtors recognise the seriousness of hounding a BC and quickly learn their position. It's a criminal offence.

Your money will come to you without any problems as you are a primary creditor, ie. essential. Additionally with the wife opening up a fresh account, this makes things a little safer although with this £45k figure brandished about if I was in your position I'd prefer the OR control the rent coming to you.

Also.. The reason why she will have opened a fresh account is that a BCs accounts are frozen within a week. This enables them to remain in relative control and make some guarantees to you.

Hope this helps. And it will be ok, primary preferred creditor. The best thing you could do to set your mind at rest would be to go round and have a chat with them with what I've written up above in mind. You've nothing to fear, really. BCy is not a bad thing, just that in the current shady financial climate of bullying companies, it gives breathing space. You will be ok

xx

Wow - thank you for all of this. that has really set my mind at rest. he did sound very genuine on the phone and we have built up a good rapport over the last 12 months. I will now sit back and wait and see with a bit less stress and worry! Thank you again for your help

Addicted2Chocolate

he will be allowed to pay his ongoings rent obligation, but will not be able to pay you direct for any ongoing rent arrears. By ongoing bankruptcy process maybe he meant a bankruptcy petition has been presented and the hearing (where he may be declared bankrupt) is coming up.