Bankruptcy and tenancy agreement..

MyWorldIsOver

Hi there, I'm currently getting advice about me and my partner going bankrupt - but I'm getting a few different answers in regards to our rental property.

We rent privately with an estate agent (no contact with the landlords themselves) in a 12 month assured shorthold, but the tenancy has a bankruptcy clause which says they can issue us with an eviction notice if we go bankrupt.

If we had years of proven rent with them we'd not be as concerned, but as we've only just moved in we are worried they will go through with this, does anyone know if the OR will contact the EA or LL even though we have no arrears etc.

If they do, how likely is it that they'll follow through with the clause? Has anyone had experience with this at all please?

We've had Business Debtline say they are unsure if they will, we've had Money Wellness (cant say they were anything but quite honestly v judgemental and rude sadly made me feel SO small ) say that no matter what they will 100% contact our landlords but then I've spoken to the Insolvency Service helpline and got told by one person they only contact creditors so if no debt they wouldnt contact them?!

I wish everything was a little more black and white so I could try and make any sense of it all

Many thanks for your time everyone and I hope you've had a good day x

Brie

Why bankruptcy?  Is there any other debt solution that would be suitable?  If you're renting you might go for a debt relief order instead.  It still might impact on your renting but you need to make sure you're getting the right result for you.

MyWorldIsOver

Brie said:

Why bankruptcy?  Is there any other debt solution that would be suitable?  If you're renting you might go for a debt relief order instead.  It still might impact on your renting but you need to make sure you're getting the right result for you.

Sadly not, debt levels are far above any other solutions and due to mental health I will be needing to drop my income further - we owe debt to HMRC who we know will go for bankruptcy as we are already in discussions with them

luvchocolate

My examiner told me my landlord would not be notified because my rent was up to date. 

HampshireH

MyWorldIsOver said:

Brie said:

Why bankruptcy?  Is there any other debt solution that would be suitable?  If you're renting you might go for a debt relief order instead.  It still might impact on your renting but you need to make sure you're getting the right result for you.

Sadly not, debt levels are far above any other solutions and due to mental health I will be needing to drop my income further - we owe debt to HMRC who we know will go for bankruptcy as we are already in discussions with them

If your debt levels are that high how did you pass the affordability checks for the new rental?

The landlord should have done their due diligence

MyWorldIsOver

HampshireH said:

MyWorldIsOver said:

Brie said:

Why bankruptcy?  Is there any other debt solution that would be suitable?  If you're renting you might go for a debt relief order instead.  It still might impact on your renting but you need to make sure you're getting the right result for you.

Sadly not, debt levels are far above any other solutions and due to mental health I will be needing to drop my income further - we owe debt to HMRC who we know will go for bankruptcy as we are already in discussions with them

If your debt levels are that high how did you pass the affordability checks for the new rental?

The landlord should have done their due diligence

We downsized and passed all checks, we are able to afford rent and future bills fine due to changes in jobs etc so no worries of any future debts, just past business ones.

Brie

I think quite obviously that you will need to talk to the LL/EA about the situation.  Even with a DRO a LL might decide that they don't want the tenant any more.  

I haven't heard much good of Money Wellness.  Maybe you'd be better with StepChange or NationalDebtline??

I hope it all goes well.

Voyager2002

Have you asked Shelter for advice? 

fatbelly

I've never known a bankruptcy clause to be activated. I would guess it would depend on how you have behaved as a tenant. If your payments have not bern regular or if you have caused them problems, then it might be a convenient excuse to start possession proceedings.Otherwise you should be ok.

I am sorry that you had a poor experience with MW. They have received a lot of funding from the Money and Pensions Service and you should really complain.

https://www.moneywellness.com/complaints

And then escalate it to the FOS, whether or not MW says you can

ManyWays

This is from the Official Receiver's Technical Manual on the gov.uk site in the section covering the notices an OR sends out at the start of bankruptcy. 
https://www.gov.uk/guidance/technical-guidance-for-official-receivers/3-bankruptcy-orders-initial-action

3.123 Landlord – assured shorthold tenancies
Where the bankrupt resides in premises under an assured shorthold tenancy agreement, or in premises otherwise exempt, e.g. a tenancy with a local authority or registered social landlord, the agreement does not form part of their estate1. For more information on assured shorthold tenancies see chapter 24. Where the official receiver is satisfied that the rent is paid up to date, and the landlord is not a creditor in the proceedings, it is not necessary to send notice (NTL) to the landlord. Where the landlord is a creditor the official receiver should send the form NTL to them.

This is only guidance, an Official Receiver has wide powers to do almost anything appropriate in an unusual situation, which is why its hard for a debt adviser to say something 100% definite, not least because you would be surprised the important things a person sometimes doesnt mention to the adviser!

But I cannot recall a private tenant having a problem if they did not have rent arrears. Why would a landlord want to go through the hassle of trying to evict you and risk no rent for periods?

kevker23

In my instance, all my rent was up to date, I provided the examiner with my contract, but they still insisted they needed to contact the landlord to confirm the amount I was paying. Whether this was because they could see that I would probably end up with and IPA I am not sure. My landlord was absolutely fine about it.