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Bankruptcy

Bankruptcy of the tenant and debt relief orders

Do they prevent possession?

Summary

Although a money judgment cannot be made in respect of rent arrears after the tenant was declared bankrupt, or the subject of a Debt Relief Order, the making of a possession order on the ground of arrears is not precluded. It should not be made a condition of a suspended order that the tenant make payment of the arrears by instalments. It is possible to suspend the order on condition that future rent is paid.

Sharples v Places For People Limited
[2011] EWCA Civ 813

Background

Two tenants were assured tenants who had accrued rent arrears. Proceedings for possession were commenced against both on the grounds of rent arrears.

S was made bankrupt before the possession hearing.

Section 285 (3) (a) of the Insolvency Act 1986 provides that:
    "After the making of a bankruptcy order no person who is a creditor of the bankrupt in respect of a debt provable in the bankruptcy shall – (a) have any remedy against the property or person of the bankrupt in respect of that debt, or (b) before the discharge of the bankrupt, commence any action or other legal proceedings against the bankrupt except with the leave of the court and on such terns as the court may impose …"
S resisted the possession claim on the basis that the rent arrears were provable in the bankruptcy and therefore s285 (3) precluded an order for possession on the basis of arrears. An order for possession was made as the judge was satisfied that Ground 8 of Schedule 2 to the Housing Act 1988 had been made out. However, no money judgment was made on the arrears given the bankruptcy. An appeal was dismissed by the circuit judge.

G obtained a debt relief order prior to the possession hearing.

Such an order is similar t ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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