Rent Arrears

less2303

Does anyone know if Council rent arrears can be included in Bankruptcy, its just Ive been asked by someone who's considering it.

I know about the ruling that Council Tax arrears arent, but not sure about the rent.

Also, if they do go Bankrupt do the Council still have an obligation to house them or can they refuse?

At the moment they are being offered the worst places, possibly due to the arrears, so they feel they have nothing to lose!

Broken_hearted

I don't think they can, someone else may know better. As for them being offered the worst places, if they arn't paying the rent what do they expect. I think they would still have to be housed though.

lynzpower

I think this is a very difficult area of housing law, tricky. I dont iknow for SURE, but there is an aspect of being intentionally homeless. or ( IH as its called)

If a family dont pay thier rent and are evicted for rent arrears, then the council can and do find people intentionally homeless, Ie they chose, through not paying the rent or not organising the benefit to pay the rent, to allow the situation to develop where they were bound to be evicted.

The applicant needs to prove that they did not purposely jeopardise thier home. Rent arrears im afraid is the main reason Ive found for IH decisions.

I dont know how this dovetails with bankrupcy, but Id be interested to hear others thoughts on it?

Broken_hearted

I think having children also impacts on whether they get housed.

lynzpower

the law expects the social services dept to ensure that children are not street homeless, so if they are found IH and cannot find a private rented flat, the social services dept will intervene to ensure that the children are housed. However, this can take a number of forms, the law says that social services cant provide housing for adults, only children, so they can either help sort out family members to take the children, or provide foster care. They have been known to provide deposit for flats too, but depends on how much "to the letter" the SS dept is. HOWEVER, this only applies if the family are intentionally homeless, which it doesnt sound like they are if they are being offered properties.

less2303

Thanks for all your replies.

I have also found out the following with regard to Bankruptcy:

There is one issue at the moment about rent arrears which might make life a little more difficult in future and I think that a lot of advisors are looking closely at a recent Court of Appeal judgment called Harlow DC v Hall. As it's CofA it's binding on all the lower Courts.

This is my understanding of it - I'm not saying it's right!!

Any arrears of rent outstanding at the date of bankruptcy will constitute a bankruptcy debt and will thus be provable in the bankruptcy. But bankruptcy proceedings will not prevent possession being granted to a landlord on the basis of rent arrears; even if those arrears were a debt in the bankruptcy at the time the application for the possession order was made.

Should a bankrupt debtor wish to avoid enforcement of a suspended possession order, he must fulfil the conditions of the suspended order and pay the instalments ordered by the court to cover outstanding rent and costs, notwithstanding the bankruptcy order.

However, this does not mean that local authorities holding a suspended order for possession can demand payment of the arrears in full as a condition for not enforcing the possession order. The terms contained in the court order suspending possession will remain in force (subject to the right to seek a variation of the amounts due) and local authorities may not use this judgment as a lever to seek immediate full settlement.

The bankruptcy proceedings per se will not directly assist any bankrupt seeking to revise or avoid any payments ordered by the court when suspending an order for possession.

I guess for IPA/IPO (Individual Payment Agreement/Order) purposes, Official Receivers's will allow a sum ordered by the court towards the repayment of arrears in suspending the order for possession as a reasonable expense - one to argue.

Addicted2Chocolate

the last post is spot on. both council tax and rent arrears are provable debts, but landlord/local authority can take other action including still going for possession, or for council tax getting a liability order and levying distress.
yes the oR would allow the monthly rent payment plus whatever ordered by court for IPA calculation. this new ruling was only filtered down to OR's offices yesterday!