Hi everyone, hoping you can help. My friend has a failed iva and was made bankrupt October 2013. She has been told my land and property services this morning that she is still liable for business rates on a empty retail property we had as the lease has not run out yet and they said the bankruptcy only protects her for a year? Surely this isn't correct, otherwise she would be going bankrupt every year until the lease ran out!! The lease was included in the bankruptcy so surely her name would have been removed at that stage thus removing her liability for any future rates?
This can be quite a complicated area and she may need specialist advice. However the rates are due for the duration of the lease and LPS are correct that they are only exempt for the year in which the bankruptcy occurred.
The lease was probably made invalid with the bankruptcy oprder but the Official Receiver and the landlord probably want nothing to do with it either as it is only an expense. Your friend needs to speak to the O.R. and ask how the lease was dealt with in the bankruptcy as she believes she no longer has any liability to it.
It can be a problem more in an IVA as there is no way to force a landliord to take back a lease. This can be done in bankruptcy but unless the landlord agrees in the IVA then the client is bound to pay the rates until a new tenant is found.
You can be absolved of your liability to the lease but not the rates so it can be tricky.
Thanks, it's very confusing and not what she was told at her interview with the OR. she hadn't been able to get hold of him yet, but hopefully this is just a case of information not being passed down
