Bankruptcy and Landlord

PoloPonyHampshire

I have been with the CAB today and I have accepted finally that I have no choice but to file for Bankruptcy. I have minimal income and no assets except for my car which is valued at £1000. I have £61,000 credit card debts from years ago which has just been accruing interest. My husband was paying the minimum payment on them for years but we separated in Oct last year and they have not been paid since about May 2014.

I am renting privately and the landlord is lovely BUT there is a clause in my Tenancy agreement that says " The Landlord Reserves the right to re-enter the property if the tenant is declared bankrupt under the insolvency act 1986." so I am terrified if I tell them that they will evict the children and I . I am claiming benefits for the first time in my life, ive worked for nearly 30 years and that will cover the rent and pay the bills so they would not have an issue with the rent being paid. We live on a farm in a little cottage and its our home now. I suffered 22 years of abuse at the hands on my husband and I am finally happy and settled with my children and I am so scared what will happen but I have no choice. I could ignore it all and hope they leave me alone but this is not realistic or sensible. Can anyone offer me any words of advice or encouragement?

P.S. There will be no money from a divorce (If there is any money at all) for at least a year maybe 2 as my husband forced me agree not to divorce him on grounds of unreasonable behavior.

TheGardener

Hi and welcome
How good is your relationship with the landlord and have you ever had/got any rent arrears? In my experience most landlords like to keep good tenants who pay the rent on time, look after the property and don't cause trouble. If you are up-to-date with rent etc, then it may be they are quite happy to let you stay, the re-entry clause is there if they want or need to use it - it doesn't mean they have to use it. Evicting you may mean a month or two without rent and if they use letting agents, fees to find and sign up a new tenant. If its possible to speak to the landlord in advance it might be fine.

PoloPonyHampshire

thank you for your reply Well I have only been here 2 months and rent is up to date but I have read on the insolvency service website this evening that providing I am dont have rent arrears making the landlord effectively a creditor then they will have no cause to write to them

luvchocolate

Hi when I had my meeting with the O.R he told me he would not be informing my landlord.
I went B.R in 2012 due to debts from an ex and it was the only thing I could do.
I can honestly say it was the right decision for me and really has had no impact on my day to day living.
You are doing everything I advice, seeing a debt free charity and reading everything you can.
good luck x

alastairq

hi...I agree with the above.....Bankruptcy probably won't be a problem at all.

Once you petition BR, speak to the OR and ask that they do not contact your Landlord...the OR doesn't want you to be 'chucked out' either...makes their job a lot harder too.

The clause you quote usually applies if rent arrears become included in a BR.

However, one point I'd like to emphasise.......you do not have to petition for BR immediately.

Once you have made the decision...in your own mind, you are advised to start preparation for the eventual BR.

Your Debt charity advisers will be able to help stave off the attentions of creditors, by contacting htem on your behalf, and establishing a system of token payments [usually around £1 a month, whether they like it or not.]

This is to protect you a bit, if one or two seek a CCJ....[which may not be likely if token payments are being received]

You can string things out for maybe a year or more, since there is nothing creditors can really do except give you hassle.

Which, can be dealt with, as has been advised on this forum.

This time delay will allow you to build up a good payment record with your landlord.

If you discover your Landlord is a bit archaic in their views on financial status, then you will have time to seek a new home, without the problems of having a BR on your credit record....[can cause issues with credit checks, although often doesn't]

BR is the very last task to do, when dealing with debts.....not the first.

PoloPonyHampshire

Thank you so much Alastair, I had been feeling rather hopeless about it all but also it will give me time to get some work which will then hopefully put me in a better position to start negotiating settlements with my creditors. Also when my divorce goes through i may get some money from that which again will give me some money to use to pay off some of the debt. Thank you so much for your advice.

molerat

The Landlord Reserves the right to re-enter the property if the tenant is declared bankrupt under the insolvency act 1986

Where in your tenancy agreement does it state that you have to tell them ?
If you are not in rent arrears and carry on paying then they do not need to know and will probably never find out.

PoloPonyHampshire

Thanks Molerat, I think it was that I had read somewhere that the OR will inform the landlord but on further investigation it appears that he will only need to do this IF i am in rent arrears effectively making the landlord a creditor :-)

luvchocolate

Hi again...think very carefully about money you may get in your divorce settlement, if you can get your debts to a figure you can manage, fine, but if B.R is still the answer it would make sense to continue with token payments and get things you may need for your home and family......the debt free charities are the best to advise you on this.
as said no need to rush...planning is the key, sorting out a basic bank account for one thing.
we are here for you, all been there xx

debt_doctor

Hi,
I have never seen anyone evicted from a private tenancy simply because they became bankrupt. I have seen people evicted when rent arrears were part of the bankruptcy.
The bankruptcy clause in tenancies is a fairly standard term.
DD

alastairq

Luvchocolate makes a very good point!

If the OP is in line for some sort of 'settlement' on Divorce....then this would be put to better use spending on essential items for the family...fridge, washing machine, etc etc.

Rather than, throwing it away into what is essentially the bottomless pit of the debts. It probably wouldn't make any sort of dent in them, whatsoever...by the time the creditors have added excessive interest, penalty payments, defaults payments, etc.

I made that mistake a few years before I did the deed....what was owed, eventually, had placed the situation back to square one, due to charges.......what a waste?

Also, if Bankruptcy is [possibly?]your ultimate goal, then you would need to be careful not to 'favour' one creditor over the others. [this is a no-no in Bankruptcy]

Thus, divided equitably..ie, as percentages of total debt owed...even a significant sum can mean but nibbling away at individual debts.

Morals be damned..we're looking at survival here.