I'm a few weeks away from starting proceedings to declare myself bankrupt. The vast majority of the information and support I have been receiving has been from National Debtline.
The only bad effect of bankruptcy that I could not live with (and would prevent me filing for bankruptcy) is the effect it might have on my parents flat that I rent.
I have been renting this flat for over 5-years, but my parents when asked today state they dont have an official tenancy agreement for me.
I have been making monthly standing orders from my bank account to my fathers for the whole 5 years (paying the rent) and this will be reflected in my bank statements. I am also on the electoral role at my address and have been for many years. I also pay the Council Tax in my name and the Water Rates in my name. The same can be said for Gas and Electric. All bills are in my name and paid by me as would be evidenced by my bank statements or credit card statements.
For all purposes I am a "tenant" and not receiving any special favours from my parents because they are my landlord (except maybe paying about £100 less than market value rental per month).
The property is a fully self-contained purpose built one-bed flat in a small block and not physically connected to my parents home in any way.
All of the above has applied since 2003 when I moved in.
My concern Could the Official Receiver / Court view this flat that my parents own as a "beneficial interest". Obviously I cannot go down the route of bankruptcy if it stuff's up my folks value in their flat I am renting or my debtors / the Courts can get money from the value of my parents flat.
I've been advised by National Debtline it's "unlikely" to be a problem and that I need to speak to the County Court Official Receiver. Obviously I intend to do this, but it's scaring me, and not something I had previously thought about it. I have not informed my parents of my plans yet, but intend to do so before I officially file for bankruptcy.
But has anyone got an inkling of this issue and likely outcome?
Any other problems with the fact that my flat happens to be owned by my parents? I pay all bills and a market rent of 10-20% less than general average for this area.
Firstly welcome to the forum The OR will check with Land Registry to see who owns the property and if it is not in your name and you can prove that you are paying the rent not a contribution towards the mortgage then i don't see a problem. You are not the only person who pays rent somewhere but does not have a tenancy agreement. I'm sure an expert will be along to allay your fears.
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman) Life's too short!!!
Bankruptcy with parents as landlords
Posted - 25 April 2009 : 12:14:17
