Bankruptcy and the World of Rentals

A bankruptcy on your credit report does not automatically preclude you from being able to rent a place to live. It is a given that not all people have perfect credit. Foreclosures, repossessions, lack of steady employment due to the uncertain economic times, etc. are, unfortunately, a fact of life today. With that being said, you should be aware that potential landlords look at a variety of factors when deciding on potential rental clients:

  1. Those filing for Chapter 7 bankruptcy protection need to have their bankruptcy petitions discharged before a landlord will consider renting to you. Likewise, those filing for Chapter 13 protection should be able to produce current repayment plans that illustrate repayments as agreed.

  2. Potential landlords can look favorably on someone who had “good” credit before filing for bankruptcy and who is establishing decent credit post-bankruptcy.

  3. A solid wage earner is a desirable renter to a potential landlord. The longer you have been employed, the more likely it will be that cash will be available for those monthly rental payments.

  4. Many landlords require deposits; if you are able to provide deposit money you could be looked upon favorably by a potential landlord. CAUTION: “Be real” when looking for a rental property. Your rent should not exceed 30% of your earnings!!!

  5. Honesty is the best policy. A private landlord may not question you about any bankruptcy filings, but rental companies very well may bring up the subject. TELL THE TRUTH!!! Be factual, honest, and accurate with your explanation and offer as much information as possible about the worthiness of your current economic picture. In situations like this, a co-signer could also be very helpful.

Bankruptcy should have little effect as to your finding a residence to rent. If you have further questions as to this issue please contact Bankruptcy Attorney Carmen G. Soto, PA.

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