Renting to bancrupt couple

[loosenknot]

Hi. I own a property that is my sole source of income. A couple have asked to rent it. It took three weeks for the credit checks to come through and when they did it turned out that the couple have been declared bancrupt. (Although this will apparently run out in March, whatever that means). They are self employed and apparently preciousky good Tenants. The estate agent says they pay themselves a high salary. What is the risk if I rent to them? The letting agents said I could ask for six months rent in advance (although the cash would push me into a higher tax bracket). I feel mean saying no but st the same time I feel they were not upfront with me. If they had disclosed this when we met I would have considered but the fact they did not (and the house has been off the market for two weeks as they were meant to move in next week) really annoys me. What would you do.

I thought If you were declared bank riot you were automatically struck off as an accountant. It’s not exactly a glowing advertisement for their skills/business is it “lets us look after your money even though we are shit with our own” 😂

Yes you can't practice as an accountant if declared bankrupt. Could one of them have been declared bankrupt and the other is an accountant (clutching at straws here).

The estate agent told me they both had an income if 90,000 and were self employed as book keepers.

Book keepers aren't usually accountants, and that's an amazing income for a bookkeeper.

Anyway. They might well pay but the were not honest with me and so I don’t want them as tenants - and I’m both going to feel guilty!

Fuck - time to retrain!

I also wouldn’t trust an estate/letting agent as far as I could throw them op, take everything they say with a pinch of salt. They are unregulated and will say whatever gets them a commission.

Whose books are they keeping to earn 90k?!

I've had a DRO (not quite bankrupt but similar). I'm a good tenant, pay on time, look after properties I've lived in and had glowing references from my landlords.

However, I would always tell the LL before the credit check. In addition to this letting agents in the past have tried to tell me not to say anything as it may not show up (I've always ignored this advice) so I don't trust them - they probably knew, have no proof of income, they could have been evicted from their old property by the agent is not going to tell you as they want the commission.

Definitely run! Something is not right. Book keeping at 90k??!!?? Plus the forms you fill out for credit checks always asks if you have been bankrupt- they have already been dishonest as they must have ticked 'no'.

Hmm. I was prepared to give them the benefit of the doubt but given your latest information I'd say something's not entirely above board.

You can be discharged from bankruptcy in one year now but it will show on any searches for six years, so were they made bankrupt six months ago? If so, I'd say that's why they're having to move as an administrator of the bankruptcy will not see 5k a month rent as reasonable expenditure.

If they were discharged 5 and a half years ago and they have 6 months of it remaining on their credit record that's slightly different.

I'd still question 90k as a book-keeper though. Do they work for the Mob?

Have a look on the insolvency register, more info will be on there.

Our very reputable estate agent recommend a couple. They were both self employed, no bankruptcy but a ccj. They told us they were perfect tenants, used to rent a very nice property and they had passed the financial eligibility.

We met, they seemed lovely and responsible people. The truth was they were relying on tax credits to survive and had to downgrade when their eldest turned 20. Then the next one left two, they started subletting, trashed the property, left without notice after stopping paying rent for two months. We were then informed they were involved in dodgy business hence moving.

On the end it was a blessing they left but it really toughy me a lesson. Agents were all apologetic, said they had no idea etc...

They could be great people 2ho had one bad turn and are now back on their feet and struggling to find somewhere to rent hence the secrecy but unless you can't find anyone else, I wouldn't take the risk. You can always meet them and ask for a lot more questions.

Bookkeeping skills + self employed could mean the income statements they've give your estate agent are completely fudged.

Going bankrupt doesn't necessarily mean bad with money, but what you have been told doesn't make sense. Accounts can't practice if they go bankrupt. I really think you need to find another tenant, and another agent.

I wouldn't even think about it. Why did you do the credits checks if you are still considering them?

Can you pay yourself £90k pa while bankrupt?

Thanks all. I did meet them when they came round the house (I was in). They seemed fine, and the only question they asked was what special cleaning product they needed to clean the floor. When they took the property they said they asked for quite a large discount but when I said no (and offered a smaller discount) they came back at the full price immediately. The only other thing I heard from them was, again, on the day they said they wanted the property, a special request via the estate agent to again ask me the right cleaning product for the floor. I didn't do the credit checks - the letting agent did but it took them two weeks (something to do with the prospective tenants being away? references?) and when they did they came back with this.

Am I being stupid but if you earn £90k plus why not discharge your debts?

Ex bankrupt here - and qualified but not practising accountant but also self employed (I work in IT systems).

Never once missed a rent payment even when I went bankrupt. Reason I went bankrupt was that I refused to take responsibility for debts my abusive ex ran up in my name - I went bankrupt to force him to pay them. Best thing I ever did.

As the for the forms - there are two types of question.

Have you /been declared are you bankrupt?

Have you EVER been declared bankrupt.

In the first case, you only need to answer yes if its in the 12 months active bankruptcy period. Between being discharged and it dropping off your record you can truthfully say no. Most consumer credit agreements use this form and I believe so do letting credit checks (or they did when I used to rent).

In the latter case, you always have to say yes even if its 20 years later. Most mortgages use this form which is why it can be trickier but not impossible to get a mortgage.

Don't presume they are dodgy liars until you see what question they were asked on the form. Also, ask them. Most discharged bankrupts will be happy to explain what happened.

I think it's clear that either something doesn't add up - and/or the letting agent is confused (i.e. he was going on what they were earning and their accounts before they let the previous house they were in -and they have subsequently declared bankruptcy and their situation has changed). Still - they were not upfront with me or the letting agent - and that's enough for me to be wary of them. Under these circumstances they should be doing the work to convince me that they are good and financially sound tenants, not me trying to find ways to make it work for them.

Thanks for your input everyone!

"Am I being stupid but if you earn £90k plus why not discharge your debts?""

In my case, I refused to pay over 100K that my ex ran up on joint credit cards and then tried not to pay. He owned a house, I didnt so he had more to lose than me.

I went back to college for a year whilst bankrupt, got my masters, then went back to contracting when discharged avoiding an IPA.

My brother had to go bankrupt when his business failed in the recession. He lost his home and everything. He managed to get work but at 50+ with bankruptcy no chance of a mortgage. They are a quiet older couple who are very houseproud but really struggled to find somewhere to rent. The landlord who gave them a chance was so sorry to see them go when they got a HA property.

I recently rented a property to a bankrupt individual. They paid 9 months rent up front and the family have been great tenants.

You only declare the income for tax purposes in the month it becomes due. As this tenancy started in February, I include 2 months of rent in 2017/2018 and 7 months rent in 2018/2019.

If they would pay 6 months up front I would take the chance I think. In 3 months I would want them to start paying monthly so effectively 3 months in advance.

I think it's annual income that effects your tax bracket so shouldn't cost more tax (I could be wrong).

How easy will it be to get another tennant?

Noooooooo stay away from them. Unless you fancy no rent and court proceedings for 4-6 months