AST, bankruptcy and housing benefit.

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    AST, bankruptcy and housing benefit.

    Hi all,

    I hope someone can offer some advice/experience for this.

    Basically my husband and I have fallen on some hard times and are going to have to declare ourselves bankrupt and start to claim some housing benefit until we are back on our feet.

    It is my understanding that some tenancy agreements prohibit these actions, but I've been through ours and can't see any mention of either.

    We will still be able to pay the rent, that won't be effected.

    My concern is that my LL might just use this as an excuse to get rid of us as we had a period of late paying last year. Everything is up to date and has been for the last 5 months and we are also good quiet tenants too. There were no issues on our last inspection.

    Does it sound like it might cause any problems? I'm feeling very nervous.

    #2
    If you are in the fixed term of your AST then you can't be "got rid of" for reasons apart from those that related to pretty serious non-payment of rent or a breach of the tenancy agreement.

    If you are outside the fixed term of your AST - which is what it sounds like - then you can be "got rid of" for virtually any reasons (or more correctly - no reason whatsoever) via a Section 21. Your Landlord is able to seek possession of the property without even telling you why. This would not be immediate, though... it would take several months. However, this position does not change because you are - or are not - in receipt of housing benefit or are bankrupt... it would be the same, regardless of any of that.

    I am not aware of anything that says you must inform your Landlord that you will be in receipt of housing benefit if your circumstances change during your tenancy. You may elect to do this, of course... that's your call. The Landlord may think "yes, the Council can pay me direct (if you agree) and I'll always get my money on time" or the Landlord may think "I feel this is too risky for me, now, I'm going to try and get different Tenants". That can't be predicted. Some Landlords, for sure, don't like to have Tenants who are in receipt of benefits (any benefits it can seem).

    I do not think you need be so nervous. At least not in the short term. Others may add more.

    Comment


      #3
      Be upfront, keep LL informed of any change in circumstances.
      If you tell LL about your planned IVA and explain reasons for it, he may be reassured, provided rent is paid on time
      LLs can evict anyone with s21 (no fault notice), but prefer Ts who provide a regular income. Your LL may serve a precautionary s21 if not included in AST, 'just in case'.
      The IVA will appear on your credit file which may make next LL more cautious about offering you a tenancy.

      Comment


        #4
        Thanks for the replies 😊

        I don't think I'd inform the LL about the housing benefit, it won't be the full amount, we'll still be funding well over half the rent ourselves.

        The bankruptcy as I understand it will be reported to them by the OR anyway, so I may as well mention it.

        I'm well aware that we'll have issues getting another LL to agree to a tenancy after the bankruptcy, I think that's why I want to be extra cautious and not risk getting that S21 served.

        So if there's no mention in the TA, then HB won't effect their insurance or anything like that?

        Comment


          #5
          Being bankrupt is not illegal and should have no effect on your tenancy, why should anyone tell your landlord of the bankruptcy? I don't think the OR will.
          If you can continue to pay your rent, with or without LHA, there is no reason to inform him of your financial difficulties.
          I offer no guarantee that anything I say is correct. wysiwyg

          Comment


            #6
            How would your landlord find out that you are bankrupt?
            Allow tenants to protect their own deposits. I want free money when they do it wrong

            Comment


              #7
              It will be in the local paper.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                I had a tenant who became bankrupt: She told me (always a better way of finding out, IMHO). I got the very strong impression from her that there was no way she was not going to continue paying rent in full on time: Basically if I gave her a true reference after rent arrears she was stuffed.

                In my opinion a sensible landlord would accept you continuing: Sadly not all landlords are sensible (nor all agents, nor all tenants, nor all MPs...

                It may just be that the landlord insurance prohibits renting to those in receipt of HB/LHA: If this is alleged ask - calmly & politely - to see a copy and if correct perhaps doing a deal on LL getting insurrance that covers you..

                Good luck!
                I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                Comment


                  #9
                  Not any more it isn't (unless, for some reason, the local press have an interest (ie you are notable locally for other reasons) or you are being "dodgy" - if a BRU/BRO is required by the OR then they will advertise this). Otherwise, people will have to either scour the London Gazette or actively search for your details online (only there for the year of the bankruptcy itself ie until discharge) and then three months afterwards.

                  I went through bankruptcy in 2010/11 (had to stop working due to ill health). Was living in a private rented place (sharing with a friend) at the time. My landlord *wasn't* informed - and we kept paying rent as normal.

                  OP, go to the MSE forums, the bankruptcy board there is a fabulous wealth of information and non-judgemental people who have all been-there-done-that and come out the other side.

                  The only people (IRL) who know I went through bankruptcy are those friends who needed to know, my creditors, my employer (I was still employed although not well enough to do the job) and the debt counsellor I saw. I'm now 3 years post-discharge, have a contract mobile phone and have just got a credit card (which I pay off in full each month - am using it to rebuild my credit). I have radically changed my spending patterns and if I can't afford something, I don't get it. It was the lightbulb moment which I needed.

                  Comment

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