Bankruptcy and rent arrears

sam222

Hi there

i declare br. 5 weeks ago,and done my interview,i had some £200 council rent arrears for last year, that i was forgoten to includ it to my br. Forms,that's why i called or again and told him about it,and i gave him the council address too,he said this should be included to your br. And also said he will write to council income collection team, but today i called council to see if they recived the or letter,but they said rent is excluded from br. I am confused really,i don't know who is right , who is wrong ,,can sombody advise me please

mant thanks

Ifonlyi

I cant be of any help for you but I had the same problem, I put housing association rent arrears on BR forms & OR said it was included, but Housing did not except this as on my tenency agreement which I had not read fully, it stated rent arrears were not to be included in BR and if you were to push this you would risk loosing your tenency. so I had no choice in continuing to pay my rent arrears although it was on the BR.:(

HappyMJ

As above you risk losing your tenancy if you include them.

alastairq

The BR individual cannot be picky regarding what debts can, or cannot be included within the BR.

However, if there is a non-BR clause within the tenancy agreement, then that might be invoked.

I would presume that the rent arrears would simply remain as that...ie not technically a 'debt'.....which might mean, the HA or Council may not be able to recover those arrears...but that they have to 'stand?'

immoral_angeluk

Rent arrears IS a provable debt in bankruptcy, regardless of what the landlord says. It cannot be just 'excluded'.
The technical manual for official receivers states this:

Any arrears of rent outstanding at the date of bankruptcy will constitute a bankruptcy debt and will thus be a provable debt in the bankruptcy (see part 1). The landlord is not entitled to recover any arrears of rent, except by way of dividend in the bankruptcy. A possession order granted might still be suspended but not on condition of the payment of rent arrears. Any suspended possession order in force at the date of the bankruptcy order might be varied to remove any provision for payment of rent arrears.
When assessing the bankrupt’s income for IPA/IPO purposes, official receiver should not include any amounts payable in respect of rent arrears under a suspended possession order. Commencement of the agreement might be deferred or stepped allowing the bankrupt time to seek a variation of the suspended possession order. Under no circumstances should the bankrupt be advised to cease making payments under the terms of the suspended possession order before it has been varied by the court. 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).

In general terms, rent arrears AREN'T Excluded, and the official receiver also should not allow payments to rent arrears when calculating an IPA/IPO. If there is a suspended possession order in place, the debtor should be looking to return to court to vary the terms of the order to current rent only as the landlord has no right to recover the arrears and obviously this *could* put the tenancy at risk. Moreso if you have an assured shorthold tenancy as the landlord could look to recover possession of the property regardless of the arrears, or as said above, their may be an insolvency clause in your tenancy which could be invoked.

All that said, ORs can (and often do) allow the debtor to repay rent arrears out of 'surplus' income if there is any but cannot allow that expenditure to be added when calculating whether the debtor can afford to pay anything into the BR via IPA.....

debt_doctor

immoral_angeluk wrote: »

Rent arrears IS a provable debt in bankruptcy, regardless of what the landlord says. It cannot be just 'excluded'.
The technical manual for official receivers states this:
In general terms, rent arrears AREN'T Excluded, and the official receiver also should not allow payments to rent arrears when calculating an IPA/IPO. If there is a suspended possession order in place, the debtor should be looking to return to court to vary the terms of the order to current rent only as the landlord has no right to recover the arrears and obviously this *could* put the tenancy at risk. Moreso if you have an assured shorthold tenancy as the landlord could look to recover possession of the property regardless of the arrears, or as said above, their may be an insolvency clause in your tenancy which could be invoked.

All that said, ORs can (and often do) allow the debtor to repay rent arrears out of 'surplus' income if there is any but cannot allow that expenditure to be added when calculating whether the debtor can afford to pay anything into the BR via IPA.....

An excellent answer to a subject that has become a complete farce over recent times.

DD