Renting a Home after Bankruptcy
There are plenty of people who rent their homes. Many of them are faced with financial struggles significant enough to consider bankruptcy, so it’s no surprise many renters are curious how filing will affect their ability to rent. This is especially true because so much bankruptcy information focuses on having a mortgage and protecting your house, as opposed to renting your home.
What should you know about bankruptcy if you’re a renter?
Renting is an Option for those Who Have Filed for Bankruptcy
Let’s begin with a bit of good news: chances are filing for bankruptcy isn’t going to have a significant impact on your living situation if you rent. Nor is it likely to affect your ability to rent in the future, assuming your rental history has been good and you have a steady job.
As a matter of fact, renting becomes the default option for people who did have mortgages and had to make a change in their living arrangements due to bankruptcy.
Keep in mind, though you’ll likely be able to rent during and after your bankruptcy, you might be required to pay a larger amount for a security deposit or be required to submit more information to get lease approval. Landlords need to consider their risk and want to reduce the likelihood of renting to someone who will break their lease as much as possible.
Other things a landlord is likely to consider when determining if someone is worthy of lease approval include:
- Timing of your bankruptcy: How long has it been since you filed?
- Credit history since the bankruptcy: Having a strong credit history since you filed for bankruptcy plays a bigger role in lease approval than the bankruptcy itself.
- Current income situation: Landlords want to see a steady income that shows you can afford to make your rent payments on time and still have disposable income to pay all of your other bills.
- Reason for filing for bankruptcy: This is mostly a consideration for those who have recently filed for bankruptcy and if you want to expand on your reasons for filing when applying for a lease it can have an impact on approval. For instance, a landlord might be more likely to consider someone who filed for bankruptcy because of medical issues or a divorce because he or she understands the issue was beyond your control.
In most cases, people are surprised to learn how little filing for bankruptcy actually does affect their ability to rent.
To learn more about why you can be turned down for a rental lease, check out this information from NOLO.com.
Bankruptcy Can Improve Your Life
It’s a common myth that bankruptcy is going to ruin every aspect of your life. This just isn’t true.
Instead, many people find that finally filing for bankruptcy was what helped them get their lives back on track after struggling so long with money.
If renting a home is in your future, either as a direct result of your bankruptcy or just because circumstances have you moving into a new place, it’s important to be prepared. Your situation might be a bit more grueling after filing for bankruptcy, but chances are it will all work out.
For more information about renting and bankruptcy or if you have general questions about the bankruptcy process, contact the Law Office of Robert M. Geller at 813.254.5696 to schedule a consultation.