View Full Version : Renting Off my mother... Insurance Question

21-03-2010, 19:40 PM
Hello all, first time poster here but got a large dilemma and not sure whether or not I'm being lied to.

I'm currently renting my mothers property in the northwest of england, she has her own property with her husband in the north east of england, there we go.

I'm due to declare bankruptcy this week, today my mother and her husband (my stepfather) sat me down and said I'm not able to declare myself bankrupt because they won't be able to insure the contents and building insurance due to me being a potential risk on the house, as they will have to declare that they have a bankrupt living in their property

i don't want this to become a bankruptcy/IVA based thread so Its just a simple question as to has anyone come up against something like this or is it all a smokescreen to stop me doing it, I really won't appreciate being lied to, but I need to know as this is a massive decision affecting my immediate and long term future, Any replies are appreciated

Thank you in advance

Robert hughes

21-03-2010, 20:23 PM
Try filling in an online application for insurance and see if it asks the questions, I don't ever recall seeing an bankrupcy exclusion clause in either my personal or LL insurance but given I am not or have not been, I may have not give it a second thought and so not acknowldged it

21-03-2010, 20:43 PM
I cannot see any connection between bankruptcy and potential risk regarding contents or buildings insurance, however, if you check online for insurance quotes you will see, that as standard for any quotes, you will be asked if you have ever been declared bankrupt!
Don't panick. I suggest you ring a few brokers and ask them.

22-03-2010, 11:20 AM
I have no direct experience of this but surely this must be nonsense - if this were true no one who was bankrupt would be able to rent or own a mortaged property which is clearly not the case.

There might be other issues here, e.g. you will need to convince the OR that this is not a contrived tenancy but if you can show a history of payments that shouldn't be a problem.

I suggest you pay a visit to this website www.fool.co.uk and go to the discussion boards and then go to the dealing with debt board - there are a number of contributors there who are professional debt advisors and indeed current and past bankrupts so will be able to give you chapter and verse.

22-03-2010, 11:23 AM
But a bankrupt cannot purchase or mortgage, so might not the first paragraph of your post itself be nonsensical?

22-03-2010, 12:50 PM
But a bankrupt cannot purchase or mortgage, so might not the first paragraph of your post itself be nonsensical?

True - which is why I carefully used the phrase 'own a mortaged property' - when someone goes bankrupt if they already own a mortaged property and either have no or negative equity or they sell their equity (beneficial interest) to a third party then they absolutlely can continue to own it and hold the mortgage. This is commonplace when when one half of a married couple goes bankrupt with little equity in the property - the spouse then buys the beneficial interest and they don't get thrown out of the property.

22-03-2010, 12:59 PM
Yes. Of course, where H and W own jointly, the bankruptcy of H does not affect the legal ownership at all- only his beneficial interest.