Learn Whether Your Bankruptcy Will Affect Your Ability To Rent An Apartment And What You Can Do To Lessen The Impact
By Cara O’Neill, Attorney
When you file for bankruptcy, there’s no hiding itthe filing will appear on your credit report for seven to ten years. And there’s no denying that the bankruptcy will impact your ability to rent an apartment or house after your bankruptcy case ends. Still, a landlord might consider mitigating factors when deciding whether to rent to you. Learn about how using the following to your advantage could increase your chances of renting a home after bankruptcy:
- increased available income
- bankruptcy date and discharge status, and
- overall credit history.
You’ll find a complete overview of the bankruptcy process in What You Need to Know to File for Bankruptcy in 2021.
Landlords Will Look At Your Credit Reports
Why should you be concerned about bankruptcy when looking for an apartment? The answer is simple: landlords will look at your credit reports. If they are going to rent you a new place to live, they will want to know if the person theyre renting out space to is reliable with financial responsibility. They want to see your financial history, and bankruptcy does appear on your credit report.This means that they may not want to rent a room to someone who has overdue payments and unpaid mass debts that need to be taken care of. If you have left your creditors with empty pockets after taking advantage of their services, landlords will not be too keen to rent you a room. To them, this is a recipe for eviction, which is a costly process for both tenants and landlords.Landlords want to invest in you so you can pay them. If they believe there will be no financial return on renting a room out to you, they will not rent a room out to you. Ergo, bankruptcy is just one of many factors landlords consider, along with any past repossessions or outstanding debts, before renting out a room to you.
Will Filing Bankruptcy Affect My Apartment Lease
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In a Nutshell
If your rental payments are current, getting debt relief by filing bankruptcy will not affect your lease agreement. Learn how filing bankruptcy will affect your real estate lease.
Written by Attorney Andrea Wimmer.
If youâre current with your rental payments and plan to keep living in the rental, everything will stay essentially the same. This article will provide an overview of the type of information youâll need to provide on your bankruptcy forms and what typically happens with a residential lease after a Chapter 7 bankruptcy case is filed with the court. For more detailed information about leases and bankruptcy, check out our Guide to Leases in Bankruptcy.
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Consult With A Bankruptcy Lawyer
The bankruptcy rules that apply to real estate are some of the trickier rules to navigate, and making a mistake can be costly. Plus, for most people, real estate represents the most valuable asset that they bring into bankruptcy. Because understanding what will happen to your real estate is essential, consider meeting with a bankruptcy attorney before filing your case. A knowledgeable lawyer can explain your property options in bankruptcy.
Talk To A Bankruptcy Lawyer
Need professional help? Start here.
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Why Does Bankruptcy Makes People Better Rental Applicants
Chapter 7 Bankruptcy or Chapter 13 Bankruptcy improves a persons financial stability.
- Landlords are looking for people that will be able to afford the rent every month and who wont damage the property
- Someone with a recent bankruptcy and no debt, is safer than person with lots of debt but no bankruptcy
This is because bankruptcy IMPROVES your financial situation.
It removes lots of debts, but leaves all of the income and assets in place.
Your Ability To Own A Bank Account
Bank accounts are not a form of credit, so having one is typically not an issue when you become bankrupt. Most people will still need access to VISA or MasterCard facilities throughout their bankruptcy, which can be organised via a Debit Card. Debit Cards are not the same as Credit Cards because they use the money in your bank account, not the lenders money. Most major banks and financial instituions can provide Debit Cards to customers with normal transactional bank accounts.
There have been no difficulties or challenges in respect to my personal banking.
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What Happens If I List Rent
You can choose to surrender the collateral and wipe out the debt, or you can keep the collateral and keep paying.
In other words, if you want to keep your financed tv, you keep paying for it. If not, give it back and we can wipe out the debt.
In bankruptcy, you can keep secured loans and reaffirm the debt, where you keep making the same payment, interest rate, and balance. If you choose to wipe out that debt, then you must surrender the collateral and let the creditor come back and repossess it.
Rent-a-Center is a little different. When you finance something through their offices, it is a rental-purchase agreement, and you do not own the collateral until the last payment. Technically, this means that we list the contract as a lease in your bankruptcy, same as a cell phone or apartment rental agreement. So long as we keep the lease, you keep the collateral.
According to their website:
Transaction is a rental-purchase agreement . Not available in MN or WI. You will not own the merchandise until the total amount necessary to acquire ownership is paid in full or you exercise your early purchase option . Ownership is optional. MA and RI consumers: at any time after the initial payment, you may purchase the merchandise for 80% of the remaining Total Number of Payments, plus sales tax, calculated at the time. In VT, minimum 18-week rental period applies. 90 days same as cash not available in VT. Product availability and pricing may vary by store. Participating locations only.
Tips For Renting An Apartment After Bankruptcy
After a bankruptcy, I educated myself about personal finance and how to maintain a good credit score.
Learn 10 tips for renting an apartment after bankruptcy.
Finding an apartment to rent after going through a bankruptcy can be a challenge, but its definitely possible. In many cities, landlords cant afford to be quite as selective as they were in the past regarding potential tenants credit.
If youre in the situation of needing to find a place to live and are worried about how your bankruptcy will impact your apartment search, there are some things you can do right now to make your search easier and more successful.
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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:
Consider Renting From A Private Property Owner
If you are trying to rent from a large chain, you may find that their hands are tied by corporate policies when it comes to what factors they must consider when approving an applicant. You may have better luck going through a private property management company, instead. Many will rent to you with no credit check required. Even if they do run a credit check, a private company may have more flexibility when it comes to their application requirements.
I would get a realtor. Realtors not only sell homes but find people places to rent.
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Your Ability To Get Credit In The Future
Contrary to popular belief, it is possible to borrow again after bankruptcy.
Your ability to do so will depend on your specific circumstances that can include income, your ability to pay back the loan, your recent payment history and savings especially if youre applying for a mortgage.
I have bought a house, have a mortgage and have credit cards.
Watch our video about borrowing after bankruptcy
Can I Rent After Bankruptcy
People delay or avoid bankruptcy because they are worried it will turn their lives upside. Unfortunately, the longer they wait to file the worse their lives actually get. Many are worried theyll be unable to rent an apartment or home because theyve filed for bankruptcy.
The truth is there is nothing stopping you from renting after you file for bankruptcy, but it can affect your ability to do so. Before you file or before you avoid filing its important to understand just how bankruptcy will affect your ability to rent a home.
Most landlords will run a credit report on you and will know youve filed for bankruptcy, and though they could deny you for this reason, there are usually more important factors they consider.
To find out what landlords look for when they check your credit, check out this article from NerdWallet.com.
Landlords are interested in your credit history because its a good indication for how you manage money. If your credit history is filled with repossessions, foreclosures, lawsuits and judgements, and late payments, this could increase the likelihood theyll reject your application. However, a less-than-perfect credit report alone is not a guarantee youll be rejected.
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Rental Arrears And Bankruptcy In Pennsylvania
How helpful filing for bankruptcy will be if you are behind on your rental payments depends on your situation. Whether you will be able to discharge the debt, stop the eviction, or be permitted to bring your rent currents will hinge on where you are in the eviction process. Additionally, the chapter of bankruptcy will also play a significant role.
The Automatic Stay And Eviction Judgments
Itâs a little different if your landlord got an eviction judgment against you before you file bankruptcy. In that case, the bankruptcy law will protect you from eviction only if certain requirements are met. If you canât meet these requirements, the landlord can evict you without first getting permission from the bankruptcy court.
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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
When Can You Rent An Apartment After Bankruptcy
Strictly speaking, filing for bankruptcy does not directly impact your ability to rent a house or apartment. That is to say that there are no built-in rules for seasoning periods, as there are when seeking a loan to purchase a property after bankruptcy.
With that being said, though, having a bankruptcy on your record can certainly indirectly impact your ability to rent a home. In particular, its important to remember that most landlords and rental companies will perform a credit and background search as part of the rental application process. Remember that bankruptcy can have an impact on your credit score in the short-term, which may make you look less reliable as a renter. In the long-term, bear in mind that a bankruptcy filing will appear on your credit report for seven to ten years. This may be enough for some potential landlords to deny you a rental.
Now, at the same time, its important to remember that its not all doom and gloom. Many, many individuals who file for bankruptcy are able to reenter the rental market and, often, purchase a home down the line, as well.
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Can I Get A New Apartment Lease During Bankruptcy
You sure can! It may be a bit more difficult to find a place that will rent to you than it otherwise would be, but be patient. Depending on the rental agency, you may be required to pay a higher security deposit or even be required to have a co-signer. It really depends on the rental agency.
There is a chance that you may have to apply to several places before you find one that works. When applying, be up front with the apartment complex or rental agency about the fact that you filed bankruptcy. This will help because then it will not be a surprise to them when they go to check your credit. You may want to try smaller complexes or even rentals from individuals. They may be more willing to accept you even though you filed bankruptcy. They may not even check your credit, but that is up to them. Larger rental agencies are often required to do checks so you will find that it is common practice for large apartment complexes to do credit checks before they let you rent.
You may want to ask if you qualify for a short-term lease, maybe six months or so. This could provide you the opportunity to prove you are able to make the rent payments each month. After that period, they may be able and willing to provide you with a longer lease. The ability to prove you have a steady income and are able to make the payments will hopefully indicate that you will be able to afford the rent.
Search For Rentals Near A College Or University
Landlords in these areas rent to students with little or no credit history on a regular basis and they just might be more lenient about your credit. Although these locations may not appeal to you if youre not a college-aged person, consider it a temporary situation. Once your finances and credit improve, youll be in a better position to move elsewhere.
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Renting An Apartment After Filing For Bankruptcy
There are many people out there struggling with their finances and paying their bills, especially in the midst of the global COVID-19 pandemic. And if you have recently filed for bankruptcy, whether its a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, this could impact your ability to rent an apartment.
How much does bankruptcy affect renting after bankruptcy and what exactly can you do to reduce the impact of filing for bankruptcy when renting an apartment?
When you file for bankruptcy, there is definitely no hiding it. The bankruptcy filing will appear on your credit report for a solid seven to 10 years, and the bankruptcy filing will definitely affect your ability to rent a house, apartment or home after your bankruptcy case ends. That being said, a landlord or property owner will probably consider several different factors or criteria when determining whether or not they want to rent to you.
During this guide, we will delve into a few strategies that can boost your chances of renting after bankruptcy:
Chapter 7 And Pennsylvania Evictions
Chapter 7 was intended for individuals with limited income and assets. Through Chapter 7, a debtor can eliminate most of their unsecured debt in four to five months. When you file a bankruptcy case, a legal wall is created between you and your creditors. Commonly referred to as the automatic stay, this court injunction stops all collection actions against you, including an eviction. However, there are important exceptions, depending on where you are in the eviction process.
If your landlord has not begun eviction proceedings or if the process is in its early stages, Chapter 7 will prohibit any continuing legal action. However, this does not mean you will be able to stay in the property. The stay will last as long as your bankruptcy is active usually about four or five months. While any money you owed the landlord will have been discharged, your landlord will likely file an eviction action as soon as your case is closed. A petition to lift the stay could also be filed with the court before the case is closed.
This does not mean you are without a remedy. You have 30 days from the filing date to pay the money you are behind. If you can do this while continuing to pay your monthly rent, you should be permitted to stay in the property. However, your landlord might still refuse to renew your lease at the end of its term.
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