How Does Renting During Chapter 13 Work
During a Chapter 13 case, you cannot go into debt without court approval. However, a rental agreement or lease agreement for an apartment is not a loan agreement. You are promising to pay rent each month to live in an apartment or a house. You are not borrowing money. Therefore, you should not need court approval to enter a new rental or lease agreement for a home.
A few things to keep in mind when renting during a Chapter 13 case:
- Talk to your bankruptcy lawyer first. Some local rules might require you to get court approval or approval from the Chapter 13 trustee before you enter into a lease agreement.
- Make sure your attorney has your new address any time you move during your Chapter 13 case. You need to make sure you receive all notices and correspondence from your bankruptcy attorney, the bankruptcy court, and the Chapter 13 trustee.
- Keep your housing costs the same, if possible. Changing your housing costs could impact your Chapter 13 plan. If your housing costs increase or decrease, talk with your bankruptcy attorney.
- The Chapter 13 case does not impact the obligations created by the lease. Because you signed the lease after entering Chapter 13, the bankruptcy case does discharge your liability for the payments. If you break the lease, you are liable for any damages for breach of contract.
Will Bankruptcy Affect Renting A House Or Apartment
One of the big concerns people have about bankruptcy is whether the bankruptcy will affect their ability to move or lease a new apartment. Rest assured, you will be able to rent or move during bankruptcy it just might take some extra searching for the right place.
Most property owners run a credit report on you and will see the bankruptcy filing. While the property owner could deny you for this reason, they are usually looking at other factors such as your income, employment history, and rental history. Some property owners may see bankruptcy as a positive event because it shows that the renter is less likely to have other debts and will be able to afford the property.
Todays post will discuss some common questions we hear in our office and some tips for renting after bankruptcy. These answers are not considered all-inclusive and are to illustrate common scenarios.
Can my property owner end my lease because I filed bankruptcy?
No, the property owner cannot terminate your lease simply because you filed bankruptcy. If a property owner is threatening to end the lease, it may be because of non-payment of rent or a violation of other terms of the lease agreement. If it is only because you filed bankruptcy, let your bankruptcy attorney know and they can help you with your property owner.
Can my property owner refuse to renew my lease because I filed bankruptcy?
Can I move apartments during my Chapter 13 bankruptcy?
Get references and rental history from your prior landlord.
If I File Bankruptcy Will I Be Able To Rent An Apartment Or House
You can still rent an apartment after filing for bankruptcy, though it may hurt your chances in renting certain places.
Some landlords will check your credit score and take that into account when deciding whether to approve you as a renter. Some are more concerned with current income and your rental history than with your credit score.
Here are a few things you can do to increase your chances of renting the apartment or house you want:
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Can A Landlord Deny An Applicant For Bankruptcy
Applying for a rental unit places your entire financial history under scrutiny by your prospective landlord. Landlords collect financial information such as credit reports, references and income information to make a determination on whether to enter into a lease agreement. As a private business, a landlord may use his discretion on whether to rent to you based on your credit history such as a past bankruptcy, eviction or foreclosure.
Can I Rent An Apartment If I Am Currently In Chapter 7 Bankruptcy
- Posted on Sep 14, 2016
As stated in the prior answers, generally yes you may rent prior to discharge. Just remember, that entering a lease agreement is a contract to pay the rent. So if at some point during the lease term you are unable to pay, you will be liable for money damages to the landlord. In other words, your current bankruptcy will not help you get out of the new agreement.
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Provide Proof Of Consistency
Everything aside, all that matters is that you pay your rent on time each month. If you can convince your landlord that you are consistent and reliable, you will have more chance of getting that lease. If possible, provide your landlord with bank statements or previous rental history to prove that you are a grounded tenant who wont give him a hard time. Another thing you could do is provide a larger security deposit that will cover the rent for the next few months. While this could be challenging if youve recently come out of bankruptcy, it will make your landlord trust you more.
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Consider Using A Cosigner
A foreclosure or bankruptcy may be less off-putting if you have a cosigner able to offer an additional level of protection for the landlord. This is a big ask, so in addition to ensuring your cosigner has credit in good standing, make sure they feel comfortable with the transaction and know all the potential financial implications. After all, they would be on the hook should you find yourself unable to pay your rent.
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Should I Rent An Apartment Before I File Bankruptcy
One alternative to discuss with your attorney is whether you should rent a new apartment before you file bankruptcy. Before making any decisions, its important to talk to your attorney about any new monthly payments. Your attorney may recommend signing a new lease before you file for bankruptcy, as it may be easier without the bankruptcy on your credit report. With the details of your situation, your attorney will be able to guide you.
Disclaimer: The information provided here on FilingBankruptcyAnswers.com may or may not apply to you, and should not be relied upon as legal advice. Speak to an attorney to discuss any information you have found here or anywhere online before making any decisions about your legal situation.
Filing Bankruptcy Answers
What Happens When A Tenant Files For Chapter 7
This means that all creditors will need to stop attempting to collect debts from the tenant until the case makes it through the court system. Tenants that are renting will have to either assume or reject the lease that they are on. Typically, they will have up to 60 days to decide if they are going to assume or reject the lease.
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What Should I Expect When It Comes To Renewing My Lease
A bankruptcy filing should not impact your ability to renew your lease. That being said, many landlords use credit checks when deciding whether to offer or renew a lease agreement. Itâs entirely up to the landlord whether to renew your rental agreement when the term is up. This is true whether someone files bankruptcy or not.
If your landlord is an individual it may be helpful to explain to them that your bankruptcy actually makes you a more reliable tenant, as your disposable income no longer has to go towards debt payments or be subject to garnishments, making it easier to make your lease payments. If youre planning on moving, can also explain this to any potential landlord and that, combined with a security deposit and good rental history, will help in finding a new rental, even with a less than perfect credit history.
Upsolve can help
If youâre struggling with more debt than you can ever hope to pay off, filing bankruptcy may be right for you. Upsolveâs Learning Center contains free educational articles like this one for anyone interested in filing a personal bankruptcy. Eligible individuals who want to file Chapter 7 bankruptcy but canât afford to pay for a bankruptcy attorney are able to use Upsolveâs free web tool to prepare their bankruptcy forms and file on their own .
Gather Character References And Letters Of Recommendation
Even if your credit score has taken a beating, there are other ways to prove you can be trusted to pay your rent each month. Gather character references and letters of recommendation from past landlords, roommates, or employers to help a potential landlord see past a foreclosure or bankruptcy filing.
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Can I Rent Or Buy A Home While Im In Chapter 13 Bankruptcy
Are you allowed to buy or rent a home in Chapter 13 bankruptcy? Yes. Will it be more challenging? Certainly.
Chapter 13 bankruptcy affects your credit history, and because landlords and lenders take into consideration, having chapter 13 bankruptcy on your history can make the process of renting or buying a home more complicated. But that doesnt mean its impossible.
Offer A Larger Security Deposit On An Apartment
For someone just coming out of bankruptcy, this one wont always be possible, but if you are able to put together enough money for a larger security deposit, this can sometimes increase your chances of getting approved. If the apartment requests one months security deposit, offer two months or more.
Offering a larger-than-required security deposit can sometimes help your chances of getting approved for the apartment you want after bankruptcy.
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How Soon After Bankruptcy Can You Rent An Apartment
Even though many people worry that they are not going to be able to rent an apartment after filing for bankruptcy, that is not always the case. Bankruptcy filings may hinder your ability to secure the apartment that you desire, but you have plenty of options waiting for you out there. For those who appear confident, possess a clean image and effectively communicate the strengths of your current financial situation, you will be able to find an apartment to rent directly after your bankruptcy is discharged.
Tips to Securing Your New Apartment Right Out of Bankruptcy
When you are trying to figure out where it is that you want to rent, make sure to ask the leasing agent about their specific credit requirements and deposit required for you to rent the apartment. Most of the time, the management company is going to require a credit check before they end up renting you the apartment.
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Improving Your Chances Of Renting After Bankruptcy
These tips might help you persuade a landlord that you’re a sound rental risk.
- Present rent payment records. Suppose you can show that you didn’t break your leases or rental agreements with other landlords before the bankruptcy and that you consistently made rent payments on time . In that case, a bankruptcy might not matter so much to a potential landlord.
- Explain your situation. Most people file for bankruptcy due to circumstances beyond their control, such as an illness, divorce, death, or job loss. Try explaining the events leading up to the bankruptcy and why those conditions aren’t likely to happen again.
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Can Rental Debt Be Discharged Through Bankruptcy
In todays economy, renting an apartment or home is quite common. Nearly 40% of people in the United States are renters, and many of them are facing financial hardship.
If you have lost your job or are experiencing other financial difficulties you may find yourself unable to keep up with payments on your lease. You may even be facing eviction.
What happens to rental debt if you file for bankruptcy? If youre still living in the home will you be allowed to stay? Rental debt is unsecured debt that can be forgiven through bankruptcy, but before making any decisions read on to learn how the debt is handled in Chapter 7 vs. Chapter 13 bankruptcies.
Bankruptcy And Renting An Apartment
Finding a place to rent after you file for bankruptcy in Utah is a common concern for many people as they try and decide if bankruptcy is right for them. If you are currently renting an apartment or house when you file bankruptcy your landlord may not even know that you filed. If you owe your current landlord money when you file your bankruptcy then they will be notified of the filing. Bankruptcy and renting an apartment is a common issue. Ongoing rental issues can vary depending on the kind of bankruptcy you file be it Chapter 7 or Chapter 13 so work with an experienced bankruptcy lawyer to know how your situation may play out.
It is my experience that landlords are looking at your rental history and your source of income more than anything else. Those two factors tend to be the biggest concern for most landlords. If you dont have evictions or unlawful detainers on your record and are employed or have another good source of income finding housing should not be too difficult. #utahbkguy
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Securing A New Rental Agreement For An Apartment Or House After A Bankruptcy Filing
You will most likely be able to rent during and after your bankruptcy. However, you may be required to pay a larger security deposit or submit more information, such as a credit report or bank statements, to get lease approval. Landlords need to weigh their risk and seek to minimize the chance of renting to someone who would break their lease.
Filing bankruptcy can be a good thing in that it increases your disposable income. In addition, now that the financial crisis that caused your bankruptcy is over, you should be in a better financial position.
You can more easily make your debt payments after you receive a bankruptcy discharge. This would also make rent payments easier to make.
There are many factors a potential landlord will look at when evaluating a possible tenant after a bankruptcy filing before entering into a rental agreement. These can include:
Are There Alternatives To Chapter 13
Yes, there are many alternatives. Chapter 13 bankruptcy is often much more expensive than a Chapter 7 bankruptcy. You have to pay a higher attorney fee, and you also have to pay trustee fees. Sometimes your Chapter 13 plan payment can increase as well, making a Chapter 7 unaffordable.
Understand how much a Chapter 7 bankruptcy would cost and estimate qualify using the free calculator below. Understand the costs differences between Chapter 7a nd Chapter 13
What Things Can Help Change My Eligibility To Rent An Apartment
Remember, having a bankruptcy filing on your credit history does not automatically mean you will not be able to live your life. A landlord has the opportunity to look at other factors that will come into play regarding whether you would be a good tenant.
- Your employment history. If you have a solid employment history, then this can play a big role in whether or not a landlord will rent out an apartment or home to you. They may want to know how long you have been working at your job, how much you make, and what other kinds of jobs you have had. An employment gap is not necessarily a bad thing.
- Show your payment history. If you have receipts or invoices that can show you paid your rent or mortgage on time and consistently, this can be positive. Many people are still able to make their rent even if they are in credit card debt.
- Use your filing date to your advantage. In the first few years after you have filed for bankruptcy, this can still be so fresh that a landlord will be hesitant to let you rent. However, if it has been a few years, the bankruptcy will be less and less a reason that someone does not want to rent to you.
- Show that you are making payments. While you may have filed for bankruptcy, you can show that you are now making your credit card payments on time and making them consistently. This can go a long way in showing that you have started over and are working hard to be stable financially.