There are many people who are struggling to manage their finances and pay their bills, especially amid the global COVID-19 pandemic. And if you’ve recently declared bankruptcy, whether it’s a Chapter 7 Bankruptcy or one Chapter 13 Bankruptcythis could impact your ability to rent an apartment.
When you declare bankruptcy, there is certainly no way to hide it. Filing for bankruptcy will appear on your credit report for seven to 10 years, and filing for bankruptcy will certainly affect your ability to rent a house, apartment, or house after your bankruptcy record ends. That being said, a landlord or landlord will likely consider several different factors or criteria when determining whether or not they want to rent to you.
During this guide, we’ll cover a few strategies that can increase your chances of renting after bankruptcy:
- Disposable income. Potential creditors and lenders do not always see bankruptcy as a negative thing. Many credit card companies and car lenders are happy to extend credit to someone who has recently filed for bankruptcy and paid off their debt, because these lenders know that these borrowers are likely to have more of disposable income now because they don’t have huge credit. card payments. Another thing to consider is that these lenders know that you won’t be able to file for bankruptcy and pay off your debt for a long time, due to the timing rules around multiple bankruptcy filings. And landlords generally think the same way as these lenders. Landlords who also own the place you’re looking to rent are more likely to listen to you and consider some of the same factors that creditors or lenders would consider. And most landlords are more interested in how much money you are currently earning or have available to pay your rent than whether you have already filed for bankruptcy.
- Employment history. Another criteria that many landlords consider when deciding whether or not to rent to you is your employment history or job stability. The landlord will want to know your employment history, as well as the duration of your current employment, whether or not you are a permanent employee, your employment history, including employment gaps, your hourly rate or salary, and your salary history . The longer you have been employed in your current job, the better. Your landlord will likely want to compare your past financial situation and whether or not you were able to pay your bills with the income you had before declaring bankruptcy to your current financial situation, including your current debt-to-income ratio.
- Bankruptcy status. If your bankruptcy case is currently pending and you have not yet received a discharge or termination, a landlord is unlikely to be willing to rent to you, especially if you are in the middle of a bankruptcy case under the Chapter 13. If you need a bankruptcy court to approve your new debt, the landlord probably won’t be willing to wait for your case to be over. Keep in mind that while most landlords or landlords probably won’t be willing to rent to you if your Chapter 7 bankruptcy case is still pending, savvy landlords will likely understand that any debt you incur after the date you filed for Chapter 7 bankruptcy will be your obligation to pay.
- Bankruptcy filing date. Keep in mind that your landlord will most likely review the date you filed for bankruptcy, and many landlords will be reluctant to rent to you for the two years immediately following the bankruptcy filing. But over the years, bankruptcy, whether Chapter 7 or Chapter 13, is likely to have less of an effect on your ability to rent or not, especially if you’ve since managed your finances in the most efficient way. responsible as possible and taken the necessary measures. to clean up your credit report.
- credit history. Your landlord will likely check your credit report no matter what, even if you haven’t filed for bankruptcy. Your landlord will look for any problems in your credit report, including lawsuits or judgments, evictions, late payments or defaults on debts such as credit cards and repossessed vehicles. If something seems out of place or it looks like you’re currently in financial trouble and struggling to pay your bills, you probably won’t be allowed to rent.
Increase your chances of renting after bankruptcy
The criteria listed above may seem daunting, but fortunately there are steps you can take to increase your chances of renting after bankruptcy and persuade your landlord that you are a safe rental risk:
- Submit your rent payment statements. If you are able to show your potential new landlord that you did not break any rental agreements or leases with other landlords prior to your Chapter 7 or Chapter 13 bankruptcy and that you have always paid your rent at time, your bankruptcy might not do much. a difference with your eventual landlord. We recommend using canceled checks and letters or receipts from previous owners to make your case.
- Explain your story or personal situation. Most people choose to file for bankruptcy because they are unable to pay their bills for financial and personal reasons that are usually beyond their control, including death, divorce, loss of a job or illness, either their own or someone in his family. If you had to file for bankruptcy due to circumstances beyond your control, you should explain the events or circumstances that led to the bankruptcy to your potential new landlord. You can also explain why these events or conditions are unlikely to recur. Your landlord will likely be more understanding and willing to rent to you if they understand your situation and are reassured that it’s unlikely to happen again.
If you are considering renting after bankruptcy, the Van Horn Lawyers Group can help. Contact us or visit our website to learn more here.