I am thinking about going bankrupt as I have been made redundant and I am only receiving a few hundred quid in redundancy money and owe thousands in credit cards, an overdraft (which I have been living off of) and a car on HP.
I also owe my landlord rent arrears which I cannot pay.
What I want to know is can I include the rent arrears in bankruptcy and will I be in trouble for using the overdraft as I have to live off of?”
You ask a couple or good questions, and I’ll explain in my answers how you may want to be careful with including rent arrears in bankruptcy, and also not too worry about the overdraft situation.
You can include rent arrears in bankruptcy, however if you do this, and you are still living at the residence you owe the arrears for, the landlord is within their right to have you move or evict you. So if you plan on staying where you are, you would want to work out a repayment plan for the arrears outside of the bankruptcy; and this is allowed as rent is a priority bill or payment.
If you plan on moving, or cannot afford to stay there or work out a repayment plan, then yes, you can include the rent arrears in your bankruptcy and have them discharged.
As for the continued use of the overdraft, this is not something you should continue to do, especially if you know you are insolvent and soon to go bankrupt. Not that you would be the only person who has done this, but it is not something one should do and is advised against.
If the Official Receiver did feel you misused the overdraft, they could have a BRO or bankruptcy restriction order placed against you; which in essence keeps you under the restrictions of bankruptcy longer than the usual 12 months. Not the end of the world, but not good either.
I hope this helps in answering your queries and concerns.
Jon Emge is an experienced UK debt advisor who has helped thousands and thousands of people in the UK to deal with problem debt. Jon specialises in finding good solutions for problem debt using a variety of UK specific techniques.
If you have a question you’d like to ask about how to get out of UK debt, just use the online form. I’m happy to help you for free.