this from the technical manual
"31.7.31 Rent arrears
In a recent unreported Court of Appeal hearing, the Court of Appeal held that the right of a landlord to recover his/her property from a defaulting tenant, irrespective of whether the landlord does or does not require a court order to do so, is not affected by bankruptcy.
The Court of Appeal case concerned the situation where a possession order had been obtained against a tenant in respect of rent arrears by the relevant District Council. The possession order was then suspended when the tenant agreed to pay current rent plus an amount to discharge the arrears. Subsequently the tenant was declared bankrupt and the Court of Appeal did not dispute that rent arrears outstanding at the date of bankruptcy became a provable debt in the bankruptcy proceedings.
However, the Court of Appeal determined that the possession order was not a remedy against the property or person of the bankrupt and therefore was not restricted by the provisions of the Insolvency Act section 285 (3) (with reference to earlier cases of Ezekial v Orakpo <1977> QB 260 and Razzaq v Pala <1997> BPIR 726 ). The Court of Appeal made it clear that the local authority might have sought possession of the property both before and after the date of the bankruptcy order.
The consequence of this is, where a possession order is made in respect of rent arrears, the court may suspend that order on the condition that the rent arrears will be discharged over a period of time. Where the individual concerned is an undischarged bankrupt then it is anticipated that any amount ordered by the court to discharge the rent arrears would be taken in to consideration when assessing the individual's ability to make payments under an income payments agreement/order.
I checked it out with the Insolvency Service helpline and the guy said that, whether or not a landlord had a Court Order, the OR would not have a problem with a tenant paying a reasonable sum towards rent arrears in order to stay in the property, even though the rent arrears were provable in the bankruptcy.
Which only goes to show that, whatever the law reports say, it’s what happens on the ground that counts.
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