Does anyone know of guidance produced by the CIH which relates to how HA's and RSL's should deal with rent accounts for tenants who have gone bankrupt..?

If anyone has this and could email me or fax me I would be very grateful.. x

I assume you are concerned about rent arrears. I don't know what you mean by CIH. But the legal position is quite clear. Rent arrears are a debt in the bnakruptcy and it is a breach of bankruptcy law for the bankrupt debtor to make any payments to the landlord in respect of rent arrears.

However, this is not commonsense as it could quite easily result in the debtor becoming homeless. I have dealt with cases where the OR has knowingly allowed such payments to be made (sometimes under a Court suspended repossession order, sometimes not), & have also been told by an OR that it the debtor makes such payments out of their allowed surplus it is of no concern to them.

This is all very well, but it does of course depend on the attitude of the local OR. I guess some may be much more difficult about it.

On the other side of the fence, I have been told by an RSL that they will not write off rent arrears which have gone into bankruptcy (& it was said this was in line with some RSL national policy, but that was a bit vague). Of course, if the RSL refuses to write off the debt they are breaching bankruptcy law as well.

Chartered Institute of Housing publishes Recovering Housing Debt: A legal guide (third edition) which seems to have an extensive chapter on bankruptcy and tenants, which sounds like what you are looking for.

information and advice now states that any tenant with rent arreas against which a landlord has a suspended possession order must comply with the terms of the court order even after being declared bankrupt, following the Harlow vs Hall case

the Adviser, debt forums and speaking to the official receiver all confirm this

Hi johnny.. thats exactly what I mean.. The RSLs can continue to pursue arrears and even eviction if there is a possession order at the time of the BR hearing..

However, I have heard that the CIH has produced guidance stating / suggesting that RSLs actually write the debt off in these circs rather than continue to chase them..

Wondered if anyone had a copy of the guidance..

I'm not sure that it is only if there is a possession order (whether suspended or postponed) pre-dating the bankruptcy that the landlord (whether an RSL or not) can go ahead to the eviction stage. My understanding has been that they can do this anyway, in relation to rent arrears which existed at the time of the bankruptcy or to arrears accruing after the bankruptcy date. In other words they can issue a Notice Seeking Possession & go to Court during the bankruptcy. However, I would be delighted to be shown to be wrong on this.

If there is guidance stating that RSLs should write off the debt in these cases I would very much like to see it - it is completely contrary to what I was told by a large RSL. (Among other issues, they were concerned that agreeing to write off such debts might encourage tenants to become bankrupt in order to avoid paying their rent.)

A housing specialist’s input may be needed here as it seems to me that even though the arrears may be unrecoverable as of right, the tenant is still in breach of his tenancy (unless there is something, say a court decision, which treats him as not so in breach) thus giving the landlord the right to seek possession.

I dont have access to the CIH website and dont know anyone who does either.. I just remember being told by someone that the CIH has guidance on this which RSLs 'could' adhere to rather than using the punitive measures they are allowed to do by law...

I know what they can do.. but if we can copy of the CIH guidance, it could be useful to try to over-ride the legal side of things.. x

nevip - I think you have put your finger on it. In my view there is a conflict here between bankruptcy law and housing law & I am not at all sure that the Harlow Hall decision clarifies it. In the Appeal Court judgement & in the lower Court the judges comment that they consider the Official Receiver would not prevent the tenant from making the payments required by the suspended possession order to the landlord (unless the rent was thought to be far too high).

This seems to me as a mere layman to be somewhat condoning a breach of bankruptcy law, which I understand to state that the bankrupt must not make any payments towards his bankruptcy debts (& the rent arrears are indisputably that), because the suspended possession order payments must include such a payment.

An undischarged bankrupt who has income over and above the amount that the OR considers he needs to live on is handing over his excess income to the OR for the purposes of paying off something at least of his bankruptcy debts, and will often be under an obligation within the bankruptcy to continue to make payments for a period - often 2 years - after the date of his discharge.

I have certainly heard an OR say that with this debt of all they would not actively prevent a bankrupt from making additional small payments (maybe at the IS TPD level) to prevent eviction. As various people have already pointed out, bankruptcy law only affects the amount of the debt, is cannot affect any other aspect of the breach of contract, and a landlord does still have the remedy of repossession available. I think there may be a certain amount of pragmatism crep in here!

if the CAH has provided guidance stating that RSLs write the debt off rather than continue to chase the arrears it hasnt reached our organistation