reclaiming rent from bankrupt tenant

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  • reclaiming rent from bankrupt tenant

    Hello all,

    Weve just learnt that a self employed tenant who is 2 months in arrears has been made bankrupt. His business, which he runs with his wife, is still trading, and according to the bankruptcy notice in the paper only he has been made bankrupt.

    I had planned to write to them warning that we plan to reclaim the outstanding rent through the small claims court, however now that he has been made bankrupt will this affect our claim in any way? We have already served them a S21 notce.

    This is new ground for me - presumably because she has not been made bankrupt I can still threaten this action?

    Any advise or comments welcome!

  • #2
    Originally posted by fallenlord View Post
    Hello all,

    Weve just learnt that a self employed tenant who is 2 months in arrears has been made bankrupt. His business, which he runs with his wife, is still trading, and according to the bankruptcy notice in the paper only he has been made bankrupt.

    I had planned to write to them warning that we plan to reclaim the outstanding rent through the small claims court, however now that he has been made bankrupt will this affect our claim in any way? We have already served them a S21 notce.

    This is new ground for me - presumably because she has not been made bankrupt I can still threaten this action?

    Any advise or comments welcome!
    1. Is the AST in joint names (Bankrupt + his wife)? If so, they're almost certainly liable jointly and severally for whole rent.
    2. Even if Bankrupt is sole T, you still have a claim with which his Trustee in Bankruptcy would deal- but there may be insufficient money left for you, as an unsecured creditor, to receive all or any of what he owes to you.
    3. Does AST state that it is terminable on T's bankruptcy? If so, [discretionary] ground 12 of Schedule 2 to 1988 Act (breach of non-rent obligation in AST) would operate and give you right to terminate.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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