Recently on our legal forum a user asked, “I am considering filing for bankruptcy protection but I understand it is a serious legal consideration with long-term consequences. I am a renter and one of my primary concerns is whether or not filing bankruptcy may hurt my chances to find an apartment to rent.”
Considerations before filing for bankruptcy
Thousands of debtors file for bankruptcy protection without any considerations of the personal ramifications. The fact you are giving this considerable thought is important. Although in a tight rental market the landlord may have their pick of tenants, if all landlords decided not to rent to anyone who had filed for bankruptcy protection they may have trouble finding a tenant.
So with that in mind, the most important thing a landlord is likely to consider is your rental history. Specifically, do you have a history of not paying your rent? Have you been evicted from a rental property? Have you broken your lease agreement with another landlord?
A landlord is less concerned about your financial history and more concerned that you will honor the terms of your lease, pay your rent in full and on time, and they will not have to get into some protracted legal battle to evict you from their house or apartment.
Other factors considered by landlords prior to renting
Now, we just argued that a landlord may not care about your bankruptcy, but there may be other considerations in your rental history that could be red flags and which may reduce your chances of finding a rental home.
For example, the landlord will want to ensure that you have adequate income to pay the rent. He will make this determination by reviewing your employment history, the permanency of your job, the length of time you have been employed, and how much you are currently paid.
Smart landlords may also request to pull your credit report. If they see a history of unpaid bills, repossessions, evictions, judgments, lawsuits, and late payments any of these issues could be a sign that you might not be a good tenant or you might not be able to pay your rent.
Tell your landlord about your financial issues
Regardless of your situation, it’s best to come clean to your potential landlord. Don’t let them come to their own conclusions after pulling your credit report. If you have suffered a severe medical emergency, recently been divorced, lost your job, or suffered a death in the family, all of these could explain a financial crisis.
There’s no doubt that in a competitive rental market where the landlord has 10 or 12 applicants for their rental property that any questionable financial issue will work against you. In a normal market, however, landlords simply want to rent to someone who will pay their rent on time and who will take care of their rental property.
When it doubt, explain your financial situation to your potential landlord and discuss options to strengthen your rental agreement.
Latest posts by Beth (see all)
- Chapter 7 bankruptcy how to avoid filing a second time? - April 24, 2017
- Chapter 7 bankruptcy how do they determine if I can file? - April 19, 2017
- Receiving Supplemental Security Income can I file for bankruptcy? - April 12, 2017