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Can you rent a property when you are Bankrupt
Money Advice, Debt Advice & Debt Help

Can you rent a property when you are Bankrupt

Can you rent a property when you are Bankrupt

If you currently rent your home it is unlikely to be affected if you go Bankrupt. However you will need to consider what happens if your rent increases or you need to move.

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Will your Landlord be told if you go Bankrupt?

If you rent your property, there should be no risk to your home if you go bankrupt. The property itself is not affected because you do not own it.

Furthermore your landlord is not informed of your situation. This would only happen if you have rent arrears and they are one of your creditors.

Bankruptcy is not advertised. As such as long as you continue paying your rent on time your landlord is unlikely to find out. You should be able to remain in the property for as long as you like.

Your landlord would only find out if they carry out a credit check against you or search the Insolvency Register. However most would have no reason to do this if you are paying your rent on time.

What happens if your rent increases during Bankruptcy?

Once you are Bankrupt the Official Receiver (OR) will review your income and living expenses budget. If you have any disposable income it is likely that you will be asked to pay this towards your debts each month.

If your rent then increases your total monthly living expenses will go up and your disposable income will fall. As a result you will struggle to maintain any payment that has been agreed.

In these circumstances you must inform the OR straight away. They will review your situation and can reduce or even cancel any IPA payment you are making.

If you have no disposable income and your rent increases this will put your finances under considerable pressure. If you cannot negotiate a reduction you may have to consider moving to a cheaper property.

Can you rent a different property if you are Bankrupt?

Moving to a new rented property after you have gone Bankrupt may be difficult. If you are looking to move into a Council or Housing Association property there should not be an issue. However there could be if you want to move into a private property.

Most private landlords use letting agents who will carry out a credit check against you. You are likely to fail this check due to your poor credit rating. As a result they will probably say they are unable to work with you.

There are really only two options for overcoming this issue. The first is to offer to pay 6 months rent in advance. Alternatively find someone who will stand as a Guarantor for your rent. This person must have a good credit rating themselves.

If you are using a letting agent it is best to tell them up front about your poor credit rating. This way you will not waste time if there is no way they can help you.

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    2 thoughts on “Can you rent a property when you are Bankrupt

    1. Lily says:

      Hi. I wondered if you could please help me. So I am in temp accommodation at mo with Southwark Council, and I have been told if I find myself accommodation, I would go up to band 2 in housing list. Now the thing is is that they have asked me to go in private accommodation. I have liked a few and have put in offers , but because I declared bankrupt last year I am struggling to get somewhere. I am single parent and I don’t work, so it would be universal credit that pays, please is there any helpful advice you might have?

      1. Hi Lily

        The problem you have is that your credit rating won’t be 100% clear until the record of your bankruptcy comes off your credit file. This will not be for 6 years from the start date. Until this happens you may fail the credit check that any letting agent carries out against you.

        When dealing with letting agents, I suggest you are up front about your credit rating. Tell them that your bankruptcy is over but still listed on your credit file so you are likely to fail their check. At least that way if they can’t work with you will not be wasting time.

        Offering a guarantor for your rent who has a good credit rating is sometimes an way round the issue. Do you know anyone who could do this for you? In addition, once you are discharged you can start improving your credit rating straight away. One of the ways you can do this is by starting to use credit again. Using a credit repair credit card is one option.

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