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.

My next door neighbours rent because of a past bankruptcy, and he is now self employed. She has a local part time job.

They are excellent, stable tenants and lovely neighbours.

I took out an IVA years ago. I always declare it. The fact that they didn't would be a red flag for me as they would have known it would come up on a credit check.

I am a Landlord and I would not accept this couple. Something tells me you would not be a priority to be paid and it can take months of no income before you can even remove them from your property. They haven’t provided references from their previous landlord and you have no idea if they in fact paid their rent. EA’s can be massive cheeky fuckers and are only interested in their commission which, by the way, you pay. Their obligation ends there.
It’s up to you to do due diligence. Both self-declaring they earn £90k per annum why have they got a problem renting then?

You say they are self employed accountants? If they were chartered accountants ( ie members of the ICAEW or ICAS in Scotland)!they would have been thrown out of membership of their professional body for declaring bankruptcy. I'm sure it is the same for other accountancy professional bodies. So they are no longer proper accountants.

They sound like very dishonest people. They are declaring salaries of £90k so have either walked away from debts they can easily afford to repay or they are lying about their income.

People become bankrupt for many reasons including a business. It doesnt mean they dont pay their bills. Id look into it more. Get recent years rental records, and you could have the agents take 6months advance and release the monthly figure to you

I would say the fact they lied says it all! Don't rent to them! If they were secure they'd have made a big deal about it to you.

With regards to some other comments...

We earn about 90,000 from our business but 2 years ago due to an unfortunate business decision we had nothing...literally living in credit cards. That's why we haven't bought a better house. No one would lend to us yet.

So we live in a 3 bed ex council house (which we owned previously). We're not big into home improvements or being tidy and we dress like tramps. (I exaggerate but you get what I mean!) You'd never know how much we earn! Unless you knew that we just dropped several 1000s on a car bought outright but round here everyone has cars on finance so it wouldn't be obvious!

If they've never had problems before and references are good I don't see why not, where else are they meant to live? Do you have Tennant insurance?

@loosenknot actually, scrap precious post. You can work as an accountant if you've been bankrupt so that is dodgy.

You can work as an accountant even if you've been declared bankrupt. IT depends on why you ended up bankrupt.

ACCA and CIMA I believe will look at each case individually - cannot comment on ICEAW and ICAS.

I wish people would not spout things they know nothing about.

You can work as an accountant even if you have no qualifications at all but unlikely an unqualified bookkeeper would be earning £90k pa. To call yourself a chartered accountant you must be a current member of one of the bodies whose members are entitled to use that title.

I commented on ICAEW as I know about their rules. Did say I don't know for certain about other bodies. From what you say, though, it is unlikely ACCA would keep many bankrupts as members as there would likely need to be exceptional circumstances. The risk of reputational damage to the organisation would be too great otherwise.

The person you need to speak to is their previous landlord. They would be able to give you a clearer picture of their suitability as tenants. Without that I wouldn’t take them on.

I went bankrupt in my early 20s. Things got out of hand with debts from uni and the fact I could only get shitty minimum wage jobs for the first year - it all spiralled and I was an idiot.

I’ve never missed a rent payment in my life and now have a mortgage. Of course I had much more money available after bankruptcy as I had no debt to pay. I’m now mid 30s and still don’t have a penny of credit card debt or any loans, only the mortgage. Believe me, i learned my lesson.

However, self employment plus bankruptcy is a more complicated issue, especially if they are still self employed.

They sound like very dishonest people. They are declaring salaries of £90k so have either walked away from debts they can easily afford to repay or they are lying about their income.

^This. Also they won’t be professional
Accounts as they have been declared bankrupt

Seriously, where are bankrupts supposed to live??? They will have no debts which means they are more likely to be able to pay the rent rather than having ££££ go out on loans and credit cards every month! I m going against the grain here and I would give them a chance, maybe with a guarantor. There's so much prejuduce towards bankrupts it's unreal, people make mistskes, lose jobs, don't get paid, it's not always about being irresponsible with money!!

We had to move earlier this year,
I am self employed DH was a SAHD and we both have shocking credit. One landlord wanted double deposit and 6 months up front, over 8k up front (plus rent every month, they wanted the 6 months as security) people don't have these funds up front!! Luckily, we found a lovely private landlord who has received his rent in full and on time for the last 8 months....

Another one here who says you can't work as an accountant if you've been bankrupt previously

I wouldn't advise taking them tbh - we rented to someone who was previously bankrupt with a guarantor for the rent, it didn't end well and he didn't pay the right amount or any amount on time tbh! Never again!

So much judgement on this thread from people who don't know the facts! Or indeed the circumstances of these prospective tenants.

OP either just say no or ask them what happened and speak to their current/former landlord. Then decide if you're prepared to give them a chance renting your property. For all you know their creditors are going to be getting a 100% payout!

It is not being judgmental to point out possible problems that could occur. Lots of people with seemingly aspirational lifestyles are heavily in debt and creditors, including landlords, are not a priority in their life.

Potentially, if thus couple do not pay the rent, the Op could be thousands of pounds down herself. If this couple are so good why is the EA pushing her to accept them as tenants. Surely with £180k gross per annum they could have their pick of properties. I would go as far as to say they are looking for someone naive.

I would go as far as to say they are looking for someone naive.

And that’s a judgement without the facts which is exactly what PoshPenny was talking about.

Someone who has been bankrupt for 5.5 is unlikely to have much in the way of debt if at all as they will have severely restricted access to it.

It’s perfectly plausible that after their bankruptcy they sorted their lives out, ran a successful business, pay their rent every month on time and just need somewhere to live.

Would you risk your property and livelihood then?

Would I rent to a couple who had previously been made bankrupt but could provide a solid rent payment history, positive references from previous landlord, 2 years tax returns showing stable income - yes I probably would.

Yes but this couple havent or can’t provide all these stipulations which is why I’m advising caution. Not the same situation at all. Completely hypothetical.

My friends dh was an accountant, and ran up serious debt and the first my friend knew was the bailiffs turning up, they had to go bankrupt.
I would not let to them op. Save yourself a headache.

A bookkeeper is not necessarily a qualified accountant, the qualification for bookkeeping is far lower. But I don't think I've ever heard of a self employed bookkeeper earning £90K, or even £45K!

The big issue for me is their dishonesty, they lied by omission. Without even thinking about the BR, the lies would stop me letting to them.

Agree with Miss Malice.

I would even rent to someone within their bankruptcy year if their SoA provided to the official receiver had enough in it to cover their rent.

There are many reasons someone can be bankrupt and someone who is can arguably be in a better position that someone with a perfectly clear public record (no CCJ/IVA/BR) but is in massive defaults, arrangements to pay and missed payments that a landlord would never see.

"The big issue for me is their dishonesty, they lied by omission. Without even thinking about the BR, the lies would stop me letting to them."

If the question said "Are you bankrupt" and they are not currently bankrupt then no they haven't lief by omission. Unless you think people should volunteer everything about themselves even not asked.

If the question said "Have you ever been bankrupt" then they have lied which is an offence.

However we don't know which version of the question was asked except experience tells me its more likely to be the first version.