Bankrupt and looking to rent. Will I experience problems?

Sandwich

I've just been informed of some rather gruesome changes to my Housing Benefit which will likely mean that I'll have to leave my current one-bedroom flat and rent a room in a shared house. I would really like some advice from people who know anything about this part of the rental market.

How does the process basically work? Is it like when you rent a self-contained property, where you have to have a full credit check and provide a deposit and all the rest of it? Or is it a bit more lax than that?

Also, I'll probably be declaring bankruptcy very soon. Will this limit my ability to rent a room in a shared property?

Lastly, what happens as far as Housing Benefit goes? Would I have to reapply? Would some landlords refuse to take me on if I'm in receipt of HB?

Thanks in advance.

agrinnall

Can't answer about housing benefit, maybe others can, or you might be better posting that part of the question on the Benefits board.

There are a range of letting options for shared properties, with a variety of credit check requirements. If a LA is being used the chances are that they will do the same tenancy checks as for someone renting an entire property. But in many shared properties the landlord lives in the property and is simply letting one or more rooms, and it's much less likely that they would go to the lengths of getting a credit check done. I would imagine that bankruptcy will have a strongly negative effect on a tenancy credit check, so you may be best looking for somewhere that doesn't need it. The less well regulated market (such as Gumtree and the like, or ads in newspapers or shop windows) may be your best source, just beware of scams.

Sandwich

So would it be better for me to not let on that I'm in receipt of Housing Benefit when I apply, and to avoid letting agents?

inmypocketnottheirs

As I currently work away during the week, I rent a room in a shared house. I looked at several before I decided upon where I am now. Shared lodging s relatively relaxed generally, so s long as you are clean and presentable I dont think you will have a problem.

Most just ask for one months rent and a further month as deposit.

G_M

If you are renting a room in a shared house (House of Multiple Occupation) from landlord (who does not live there) then whether the LL does credit / bankrupcy checks is up to the LL.

Some people claim agents do credit checks and LLs don't. This is a gross generalisation. Most sensible LLs will do checks.

If you are renting a room in a house where the LL lives too (ie you are a lodger) far more LLs will be informal and not do checks (partly because as a lodger you have few rights and can be evicted quickly and easily).

If you are sub-letting a room where one of the other occupants is a tenant (or a group of them are) the tenant who is subletting to you is likely NOT to do credit hecks. There again, in many cases such a sub-let is forbidden by the tenancy (but that does not mean it does not happen....)

Sandwich

G_M wrote: »

If you are renting a room in a shared house (House of Multiple Occupation) from landlord (who does not live there) then whether the LL does credit / bankrupcy checks is up to the LL.

Some people claim agents do credit checks and LLs don't. This is a gross generalisation. Most sensible LLs will do checks.

If you are renting a room in a house where the LL lives too (ie you are a lodger) far more LLs will be informal and not do checks (partly because as a lodger you have few rights and can be evicted quickly and easily).

If you are sub-letting a room where one of the other occupants is a tenant (or a group of them are) the tenant who is subletting to you is likely NOT to do credit hecks. There again, in many cases such a sub-let is forbidden by the tenancy (but that does not mean it does not happen....)

This is good information. But I'm wondering, if they do a credit check then surely if I've recently declared bankruptcy they won't rent to me?

In which case, what am I supposed to do? I can't afford to keep living in my current property due to the cut in HB and no-one in the private sector will take me on. I could apply for council housing or housing association housing, but that could take ages, and there's no guarantee of a positive outcome.

G_M

Sandwich wrote: »

This is good information. But I'm wondering, if they do a credit check then surely if I've recently declared bankruptcy they won't rent to me?

Correct. Agents and landlords who do credit checks, do this in order to find out if a prospective tenant is likely to be reliable. To pay regularly. etc

One indication is that someone who has declared bankrupt clearly has a history of financial difficulty.

So the agent/LL would be mad to ignore this. Otherwise why bother to do the credit check!!?

In which case, what am I supposed to do?

I'm afraid that is one of the consequences of getting into financial difficulties and going bankrupt! Bankrupcy is not (and should not be) an easy way just to escape debts you owe with no other consequences.

Obviously we don't know your personal circumstances, but you have run up debts (somehow) which you cannot pay. And chosen to run away from those debts by declaring yourself bankrupt.

Now you have to live with consequences eg
* difficulty getting credit
* difficulty getting a tenancy

Sandwich

G_M wrote: »

Correct. Agents and landlords who do credit checks, do this in order to find out if a prospective tenant is likely to be reliable. To pay regularly. etc

One indication is that someone who has declared bankrupt clearly has a history of financial difficulty.

So the agent/LL would be mad to ignore this. Otherwise why bother to do the credit check!!?

I'm afraid that is one of the consequences of getting into financial difficulties and going bankrupt! Bankrupcy is not (and should not be) an easy way just to escape debts you owe with no other consequences.

Obviously we don't know your personal circumstances, but you have run up debts (somehow) which you cannot pay. And chosen to run away from those debts by declaring yourself bankrupt.

Now you have to live with consequences eg
* difficulty getting credit
* difficulty getting a tenancy

It's a bit harsh though, because I've rented now for around 6 years and never missed a rent payment, not even by a single pound for a single day.

G_M

Not harsh. Real life.

You may not have missed a rent payment, but have missed other payments. And someone who has missed some payments (to the extent of bankrupcy!) is more likely in the future to miss rent payments than someone who has never missed any payments.

BitterAndTwisted

What you should do is to find yourself a room in a shared property before you declare bankruptcy, obviously. Trying to do it before you secure your onward move will make it very difficult indeed to secure a tenancy. A room in someone's home as a lodger, not so much as long as you have a month's rent in advance and a month's rent as deposit. I suggest you do something quickly before the changes in HB/LHA take effect as there are likely to be many more in your position quite soon, albeit not bankrupts.