If my lodger goes bankrupt how will it affect me?

[lowrib]

My lodger - also a mate - is considering going bankrupt. If he uses my address to do this will is affect my credit rating?
Or have any other negative affects on me?

I'm sympathetic to his position on an emotional level, but on a practical level I'm also a bit nervous as to whether it will affect me!

Does anyone know?

TIA

It wont affect you as its not houses that are "blacklisted" just people.

Make sure that on both credit files there you have no financial association-you shouldnt if you have never applied for credit/bank accounts together.

He may also have to prove his rent to the Official receiver and provide proof like a rent book (you can buy on at WHSmith/tenancy agreement)

Really? I thought bad debts on houses could affect the credit rating of the others in the same house. Am I being over cautious here?

It wise to be cautious and get advice like you are doing but I can assure you that it will have no impact on you unless you have a financial connection noted on your credit file. Sign up to a free trial (through Quidco for cashback too) check there is no association and if there is make sure you get it corrected. Easy enough to do.

It is not true that you will be unaffected.

I use credit referencing from one of the main credit reference providers and I can see all the known associates of all the people I run credit checks on and any CCJs or bankruptcy they or their associates may have had.

The best thing to do, if he goes bankrupt is get a copy of your credit record and make sure his name is not in some way attached to you as an associate.

Even better, get him to move out and change his address on the electoral role before he goes bankrupt.

ABetaDad, thanks for the response - although that's worrying!

What can I do if his name is attached to mine? Am I totally stuffed then, or is there a way to effectively disassociate yourself?

Mind you I'm confused now! I spoke to a debt helpline and they said I wouldn't be affected.

I'm going to encourage him to talk to a debt councillor anyway and perhaps he won't go for bankruptcy.
I found this lot who are a charity giving impartial, free, detailed debt advice.

We can't just chuck him out! He's a good friend as well as a lodger. I think he got into this situation partly because he's self-employed and has had much less work recently.

If you are really worried go to CAB and ask them for advice or just ring Equifax or Experian (two of the largest credit data providers) and ask them what to do. They want to make sure their records are accurate so have an incentive to make sure they do not record erroneous data.

I'm a bit disillusioned with our local CAB actually. Last time I wanted advice about something I spoke to them on the phone. They told me I had to go in person. I then queued for 45 minutes in December outside in the absolute freezing cold with my baby from 8.15 in the morning. They gave me an appointment at 11 am the same day. When I came back they said actually we can't answer your query here, you have to go to another advisor, somewhere else, have an appointment for a few days time.
Then, when I finally found someone who would talk to me, they gave me incorrect advice, which ultimately cost me lots of money and days of time sorting out the mess I got into, having followed their advice.

So I'm giving them a wide berth.

Sorry for the rant, you inadvertently touched a raw nerve!

I think I will take your advice and speak to the credit agencies, I hadn't thought of that, thanks

lowrib - that experience at CAB sounds awful. I work for a credit union (like a small co-op building society) and am going through the process of beginning work as a CAB volunteer debt counsellor so I do come into contact with this issue a lot in RL.

Your friend may not want to go for a bankruptcy by the way. It is a complicated and expensive process. He may instead want to go for a Debt Relief Order. If he has no assets other than a second hand car and unsecured debts of less than £15,000 and a low income it is a quick and cheap way of getting his debt under control.

ABetaDad that's really useful stuff, thanks very much indeed!

Get him to ring CCCS or National Debtline. He will need to get professional advice before going bankrupt anyway as his petition could be posponed until he has. CCCS have an appointment system and National Debtline will give you advice straight away.

Also get him to read this board on MSE there is a lot of useful advice.

This is a good read for you getting your credit score etc.

If you don't have any financial associations then his bankruptcy shouldn't affect you at all.

A Debt relief order is a better route but if he has paid into a pension fund or opted out of serps and his pension pot is worth more than £300 he cant have a DRO. Sadly this means that the majority of people who have worked and paid into a pension (even if only for a few months) dont qualify for a DRO.

If he is living with you now check your file. If there is no assocation (which unless you have joint accounts/made loans applications there shouldnt be) then his BR wil not affect you.

If there is an assocaition (and mistakes do happen) then you need to get it removed by writing to the credit agreements...a copy of his rent book/ agreement would be useful to include)

Agree with MrsGok...MSE...well it saved my sanity regarding money and CCCS are fantastic but sadly overstretched at the mo,