Question Regarding Bankruptcy/ Rent Arrears

catandy

I spoke with StepChange today regarding filing for bankruptcy. This is not a course I want to take and I am trying to get my head around it and the implications.

I rent my property and currently have rent arrears. SC say I need to include my rent arrears in my bankruptcy petition but if I do this I will be evicted - I have a suspended eviction order which means that it is very easy to get me out of my flat. They also explained that if I put off filing for bankruptcy till I clear the arrears the OR will be of the opinion that I have favoured one creditor over others and this is against the rules and will be an issue.

Is this the case....

John_G_Jones

Yes, pretty much.

TheGardener

Yes, technically that it true - However, keeping a roof over your head is a priority and the OR might accept this. Do you have a partner and children you live with?

catandy

I have a partner who is unfit for work and waiting on an assessment for ESA. he has been told he is unlikely to work again - he's mid 60's and had a physical job.

zero savings and only thing of 'worth' between us is a car worth perhaps 2k.

kids are grown up and left home

mwarby

Found this, it may help, although cannot be certain until its in ORs hands


from https://www.insolvencydirect.bis.gov.uk/technicalmanual/ch25-36/Chapter30/Part%204/Part%204.htm


30.98f Rent arrears – suspended possession orders

Should a bankrupt wish to avoid enforcement of a possession order, he/she must fulfil the conditions of the suspended order and pay the instalments ordered by the court. If a bankrupt wishes to make such payments to avoid losing his/her home, the official receiver should not object. When assessing the bankrupt’s income and expenditure for IPA/IPO purposes, the official receiver or trustee should allow a sum ordered by court towards the repayment of rent arrears as a reasonable expense. See paragraph 40.64. See Chapter 31.7, pragraph 31.7.31.

TheGardener

^^^ excellent post mwarby :T

I knew I'd read that somewhere but couldn't find the section of the manual.

OP - show this reference to Stepchange - they should have known this bit.

catandy

mwarby wrote: »

Found this, it may help, although cannot be certain until its in ORs hands


from https://www.insolvencydirect.bis.gov.uk/technicalmanual/ch25-36/Chapter30/Part%204/Part%204.htm


30.98f Rent arrears – suspended possession orders

Should a bankrupt wish to avoid enforcement of a possession order, he/she must fulfil the conditions of the suspended order and pay the instalments ordered by the court. If a bankrupt wishes to make such payments to avoid losing his/her home, the official receiver should not object. When assessing the bankrupt’s income and expenditure for IPA/IPO purposes, the official receiver or trustee should allow a sum ordered by court towards the repayment of rent arrears as a reasonable expense. See paragraph 40.64. See Chapter 31.7, pragraph 31.7.31.

thank you so much - huge weight lifted with that - I dont think I could cope with being made homeless on top of everything else. I will probably be back to ask more questions but at least I can see the way forward now.

thank you again

mwarby

If I were you I'd be looking to confirm this with a qualified debt counselor,(I'm most definitely not) I don't know for sure that the paragraph applies to you, or that there isn't another paragraph which would override this

Anyway no bother digging that out, hope your bankruptcy goes well, if this is what you choose

debt_doctor

I'll confirm it!

Also that bit from SC about delaying the bankruptcy would be seen as a preference is utterly untrue.

DD

Ronnierhino7

As someone who went bankrupt and had rent arrears with a suspension order, I included the arrears in the bankruptcy and nothing happened to the arrears, I still paid the rent and the amount that the court had set for the arrears, I never got a interview with the OF like people have so couldn’t ask the question unfortunately, I am now discharged about 2 weeks ago.

I am still arrears but almost finished paying it off then I have to pay the court costs, did you know that with the suspension order even when the arrears all cleared the order still stays with you and you have to go back to court to get it reversed.

ToxtethO'Grady

Please feed that back to SC as some debt advisers get an idea in their head and give incorrect advice, it'll help someone else in future.


You shouldn't have any issues with your rent arrears as there's been legal action, the only time the OR may object is if it's a high payment to the arrears that's not affordable...you can get that changed by going back to the court.


Speak to Shelter if you wish to do that 0808 800 4444, Weekdays 8am-8pm; Weekends 8am-5pm.