Going bankrupt as a landlord

Barry1108 wrote: »

Hi,
After a very messy marriage breakup I have been left with no other option but to declare bankruptcy. My question is though - I live and rent in the South of England but I actually still own a house in the North. The house is worth around £80000 but has no equity and the tenant is actually a friend of mine.
My main concern is that the OR will take the house and serve notice ( I assume) on my friend the tenant. If I applied for bankruptcy at the end of Feb, when would the notice be served on the tenant? Would it be likely to be a few months later?
Thanks
Barry

If the house has no equity then OR is not bothered but the burden of proof will be upon you. I would suggest you get all the proofs ready to hand over to OR that there is no equity in the house. Get valuation done by 2-3 estate agents and have your mortgage statement to hand to show no equity. OR's usually dont want to waste your or their time.

The tenant will not be sent notice. They will be notified about your bankruptcy and will be told to pay the rent to OR from the the day you become bankrupt. As any estate in your name will then belong to OR. If you are paying mortgage from the rent proceeds than this will create a problem where the rent money will go to OR and you will still have to pay mortgage.

Regards

MA

MaximusArgento wrote: »

The tenant will not be sent notice. They will be notified about your bankruptcy and will be told to pay the rent to OR from the the day you become bankrupt. As any estate in your name will then belong to OR. If you are paying mortgage from the rent proceeds than this will create a problem where the rent money will go to OR and you will still have to pay mortgage.

Seems unfair that in business the OR would allow a bankrupt to carry on trading and pay the business expenses, but here when they may be a profit that the OR could take an IPA from, they don't allow the bankrupt to meet his expenses.