Recovery from Bankruptcy Happens One Rung at a Time

When you file for bankruptcy the filing information will stay on your credit report for up to ten years. Employers, loan institutions, and landlords are just some of the people who might check your credit report. If you have a bankruptcy on your credit report, you may have difficulty getting a job, renting an apartment or getting a loan.

This personal bankruptcy story was posted on the internet in April of 2011, “I filed Chapter 7 Bankruptcy in December 2008 and was completely discharged in April 2009. I have no debt in my name, and it is reflected on my credit report. My score is around 640. My wife’s credit score is 670 – 680. We are attempting to rent a home because we don’t qualify to buy (I don’t have 2 years of self-employed tax returns and my wife’s income doesn’t qualify her alone for a mortgage). It doesn’t matter if I make $1.00 or $50K a month, they won’t count my income. It doesn’t make a lot of sense. I’m less likely to fire myself than an employer is and I make way more than I did with a “job”. How hard is it to get a lease approved? We’ve been passed over for a “stronger” applicant twice. I’m getting frustrated because I’ve given bank statements showing over $20K on deposit, a letter of explanation, we have decent credit scores, and my wife has a full time job that pays her well. We want to take care of a nice house in a good neighborhood and pay someone more money than we should.” 

The debtor wonders why he is having trouble getting a lease after filing bankruptcy. The answer is simple. Landlords have the option of checking out your credit history before they will lease to you. Many lease companies have policies of not leasing to those who have bankruptcies on their reports, especially when they can get a renter who has no priors and who is a strong applicant. 

Even though the former debtor, now self-employed, is making more money than he did, he has sent a letter of explanation with the application, he has increased his credit scores, and he is doing everything right to rebuild his life, why should a landlord take an extra risk on someone when they have other less risky applicants? 

The former debtor is not only a credit risk, he is less than two years into a new business venture. Most landlords realize that small business ventures have a failure rate of 50% within a five year period. On top of that, the former debtor sent a letter of explanation about his bankruptcy. Even though the man was being honest, this letter might send a red flag to many landlords that the debtor is already having problems with other landlords getting leases, otherwise, why state his problem upfront? Finally, the man and wife’s credit scores, though improving, are still low compared to others. Maybe the former debtor needs to try and lease in an area where there is less competition. 

Maybe you, like the debtor in this story, need of a fresh new start. If you need relief from the stress of debt and you live in or around the metropolitan area of Ann Arbor, Michigan, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

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