tenancy agreement - bankruptcy advice please

matthewking26

Hi,

I'm going doolally with worry about this and could do with some advice from you all please. Haven't been able to sleep for the last two nights since CCCS said "bankruptcy looks like your best option".
I think it may be the best option, having spent the last two dayslooking up as much info as humanly possible but I've looked through my tenancy agreement and it includes the following. Does this mean the landlord could boot me out if I became bankrupt?

"If the tenant shall go into liquidation or execute any deed of arrangement for the benefit of the creditors of the tenant or

In the event of the breach of any of the agreements on the part of the tenant herein contained or

If any order shall be made or effective resolution passed for the dissolution or winding up of the tenant or similar proceedings in any country whatsoever resulting from the tenants insolvency then the landlord may re-enter upon the premises and immediately thereupon the tenancy shall absolutely determine without prejudice to the other remedies to the landlord hereunder."

I let the property through an agency so only have the landlords name and bank details and his brothers (handyman) mobile number for repair issues.
I can send letters to him via the letting agency.
I know if bankrupt he would be informed by the OR but I don't know whether or not to try and contact him before going ahead with it.
My concern is the above clause in the contract, if he doesn't want a bankrupt in the property could he boot me out immediately (contract up for renewal in Oct)?
If I warn him in advance I'm considering it would that be better or worse than it coming from an OR?
Would I be better to hang on until after renewal in Oct so I'm "safe" for another 6 months to stay in the property? Or does the above clause override things anyway?

You can stop reading now (I'm rambling) but if you want the background read on.
I live alone with 21 month old boy, spends half his time with me, half at his mums house, she gets child tax credit, working tax cred and housing benefit. She needs childcare payments from me as earns so little, she wanted 200pm but if I do I'm at a minus figure every month, hence debts getting bigger and bigger and closer to disaster. So we've now agreed 100pm. Busybees is set up to start end of Sept so will save me 30pm in tax rebatey thing.
I haven't missed any cc payments (yet) but am one month in arrears on loan) but if I don't do something I'll start defaulting very soon. HSBC have rung me twice in the last two days, even after £20 token payment was made. They now say calls are on hold until 15th Aug, not sure what they think will happen in mid Aug, maybe I'll find a winning lottery ticket in the street on the 14th

Here's an up to date SOA:
in 1190

out
rent 550
council tax 100
water 20
gas 15
elec 15
tel/mob/net 20 (tied in til december)
childcare 100
vehicle insurance 21 (paid annually, cccs devised monthly figure)
vehicle tax 16
fuel 60
food 150
opticians 8 (haven't been for years but cccs devised monthly figure)
clothing, entertainment 21 (cccs devised figure as spend as little as poss)
family loan 5 (1000 owing)
Total 1080

housing benefit overpayment £10 (1540 owing)
hsbc loan £192pm (1 month arrears, £20 token payment made this month, 11757 owing)
alliance and leicester cc 2321 (limit 2500) 25pm 0% til feb
alliance and leicester overdraft -300 (limit 700) 5pm flat rate for od use
barclaycard 2287 (limit 3240) 50pm 0% til nov
hsbc overdraft -199 (limit 200) 18%
tesco credit card 2164 (limit 2500) 50pm 14.9%
virgin credit card 2750 (limit 2800) 25pm 0% til feb
natwest current account £200 in credit (trying to save up for bankruptcy fees, has £400 overdraft, so could use that for fees immediately but don't want to leap in without thinking)

So I owe around 22000, and CCCS say I have around 100 to split between creditors
They advise pro rata/token payments and bankruptcy probably the best option.
I like the fact bankruptcy would be a fresh start, no chance of even temptation of credit for many years afterwards, over in 1 year before my son is 3 and stop creditors hounding me when I start missing payments (which would start very soon)
On the downside I might get booted out of my house, they could take my car (cost 2600 2 years ago, used to drive 40 mile round trip to work each day, dropping off/picking up from child minder on the way) I live in a village with no public transport so would be stuck if they do. If they said "buy a cheaper one", what would happen if it kept breaking down like my last two bangers (500 quid to buy, 700 quid of repairs in one year,then still failed its mot as happened with my k reg escort !)
IVA isn't an option as not enough money spare each month, DRO not an option as owe too much.
My last questions are moral ones
Before taking bankruptcy whats to stop me taking all money from accounts out in cash so it isn't claimed by OR?
Is it better to stop all repayments on everything for several months and saving that money up to use during the bankruptcy?
If you've read this far, bravo, give yourself a bun.
HELP!

debtinfo

the above paragraph looks like it is refering to Ltd companies (Dissolution, winding up, liquidation are all terms to do with companies not individuals)

JPS29

matthewking26 wrote: »

Does this mean the landlord could boot me out if I became bankrupt?

I know if bankrupt he would be informed by the OR but I don't know whether or not to try and contact him before going ahead with it.
Would I be better to hang on until after renewal in Oct so I'm "safe" for another 6 months to stay in the property?

Hi Matthew,

I am a LL myself and firstly you "could" be made to leave by your LL if there is a clause in the tenancy agreement, however if one of my tenants informed me that they were BR/intended going BR, then as long as they met the below criteria I would be happy to let the tenancy continue.

* Rent always paid on time
* Property well maintained, kept clean
* No previous breaches of tenancy agreement, ie pets/subletting
* No problems with the neighbours

Also re the waiting for the tenancy to end to gain another 6 months "safe" period. I would assume that like my tenancy agreements you are on a 6 month AST, after this period unless a new agreement is made up then you would enter into a rolling tenancy, meaning a section 21 notice would only need to be served giving you notice to end the tenancy, which is a lot less than 6 months.

Good tenants are hard to find, your LL won't want the hassle of getting you out, cleaning/prepping the house again (carpets etc) then having rental voids.

IMHO you are best forewarning him and tell him you are doing this out of respect as you appreciate the property and the relationship you have with them.

Please keep us posted, good luck

pleasegivekarenadvice

I work in housing and agree with above LL,If you have kept up with your rent. I see you have a big overpayment of H/B.Call them immediately to ask them to put a hold on the repayments so you can get up to date with your rent if needs be.I have just , two days ago gone through the bankruptcy route, It took me a very long time to come to the decision.Good luck.

peppa-pig

Our tenancy agreement also had this clause. I was papping myself when the OR said I should tell the LL coz it would look better coming from me rather than from a letter landing on his doorstep.

It took a couple of days to build up the courage to tell him but he was fine with it. Said he hoped things got better for us in the future and as long as the rent was paid on time he had no problems with what we did. It was such a relief to be told that.

As the previous poster said LL's rather keep good tenants whom they have no problems with rather than kick them out just coz they go BR.

I think the clause is there just in case you don't pay your rent and are in debt to the LL, it's an easy way to get bad tenants out I guess.

We went BR a month before the tenancy agreement 6 months ran out so I too had been worried they would want us out and not let us onto the rolling contract.

matthewking26 wrote: »

Before taking bankruptcy whats to stop me taking all money from accounts out in cash so it isn't claimed by OR?
Is it better to stop all repayments on everything for several months and saving that money up to use during the bankruptcy?

I would say it depends on how much money you are talking about. If it is a couple of hundred rather than thousands I would say you could take it and use it for reasonable everyday living expenses (food, petrol, electric, gas etc).

Yes stop all repayments to creditors in order to save up for BR fees. If you try and save for use during BR chances are the OR would find out and seize it.

As for the family loan, unfortunately this would also be put into the BR pot and they won't get anything. If you make a payment to them to clear it and not to other creditors this would be seen as preferetial treatment which will get you into trouble. The OR may ask the family for the money back or in extreme cases slap a BRU/BRO on you.

Good luck

verychattyeve

I am in private rented accommodation through a letting agency.
I have been with them for over 2 years. They said as I had always paid my rent on time, was an excellent tenant and still in full time work they didnt see a problem with my bankruptcy.

matthewking26

Wow, thank you all for the advice. Weight off my mind so to speak.
Its a relief to hear from a landlords perspective that bankruptcy doesn't always = eviction.
Its also good to hear that the clauses seem to refer to companies, they didn't make any sense to me!
Rent has been paid on time every month, sometimes early as its due on the 7th but I get paid on 1st so normally pay it on the 1st.
the housing benefit overpayment was being repaid at £50 per month but they've agreed to drop it to £10 saying "as long as something is paid each month".
Re:
* Rent always paid on time - yep, see above
* Property well maintained, kept clean, - yep, carpets will need a clean if/when I leave (the hazards of having a small child!) but everything else in tiptop shape, and I've kept on top of the garden, planting herbs, pruning, lawnmowing etc
* No previous breaches of tenancy agreement, ie pets/subletting - no breaches that I know of!
* No problems with the neighbours - the neighbours keep themselves to themselves, just an occasional "hello" so no probs there

I was going to pay the family loan back before BR using the last of the credit card limits, but seeing what you've said I will leave it as it is. Don't want to seem preferential or getting further restrictions. Its not needed back urgently luckily.
Money in current accountwise, I have a £400 overdraft with natwest, unused and £700 alliance and leicester overdraft, currently unused so I could take out the £1100 in cash, so £500 for br fees, £600 for living expenses (would that be seen as taking too much?)

I thought about being nefarious and hiding the money away but frankly money has caused enough lies and stress for me so far that I'd rather be honest from here on in and take the punches as they come.

I'm on a 6 month let, yes. The contract states renewal fee of £50 to re-sign for another 6 months. I was hoping they'd just let me go onto rolling tenancy like in my last house but wondered if six month contract was safer!
I've emailed the letting agency, giving them brief details and asking for landlords contact details.
They replied saying they would pass on my email address to the landlord and ask him to contact me.
One final question for now, does it make any difference to anything/anyone if I apply for bankruptcy now, having missed only 1 repayment, or in the future after several months of defaulting on repayments?
I get the feeling this is one of those sooner is better than later things, but don't want to rush into it without having fully thought it through.
Thanks again!

pleasegivekarenadvice

I hadnt missed any payments to creditors but was living in my overdrafts and using credit cards for living expenses. the stress and strain of it all each month became too much to bear so i cancelled all direct debits and standing orders to my creditors through my on line banking then i stopped all my income to the bank.I opened another bank account the day i booked my bankruptcy at court and set up direct debits for utilities etc.I told this bank i would be going bankrupt.I used the money i would have used for debts for the fee.The bank are fine and the OR called me the day after my hearing (wednesday) and said she would write to my new bank to say she was happy for me to keep it open.

Hope that helps you .