Will Bankruptcy Affect Renting a House or Apartment?

One of the big concerns people have about  bankruptcy is whether the bankruptcy will affect their ability to move or lease a new apartment. Rest assured, you will be able to rent or move during bankruptcy it just might take some extra searching for the right place.  

Most property owners run a credit report on you and will see the bankruptcy  filing. While the property owner could deny you for this reason, they are usually looking at other factors such as your income, employment history, and rental history. Some property owners may see bankruptcy as a positive event because it shows that the renter is less likely to have other debts and will be able to afford the property.  

Today’s post will discuss some common questions we hear in our office and some tips for renting after bankruptcy. These answers are not considered all-inclusive and are to illustrate common scenarios.  

Can my property owner end my lease because I filed bankruptcy?  

No, the property owner cannot terminate your lease simply because you  filed bankruptcy. If a property owner is threatening to end the lease, it may be because of non-payment of rent or a violation of other terms of the lease agreement. If it is only because you filed bankruptcy, let your bankruptcy attorney know and they can help you with your property owner.  

Can my property owner refuse to renew my lease because I filed bankruptcy? 

Filing bankruptcy should not affect renewing your lease. However, a property owner is not required to extend or renew a lease. Some common reasons a property owner chooses not to renew a lease are: they are selling the property, the tenant has been late on rent or is behind on rent, the tenant has broken rules that are in the lease agreement.  

Can I move apartments during my Chapter 13 bankruptcy?  

Yes, you can move during your Chapter 13 bankruptcy and enter into a new lease agreement. You will want to try to keep your housing costs the same as they were when you filed your Chapter 13 case. Changing housing costs could impact your Chapter 13 plan and if costs increase or decrease, let your bankruptcy attorney know. You will also need to update your address with your bankruptcy attorney so you can receive notices from them, the court, and the trustee’s office.  

Additionally, depending on the rental market in your area and what you are looking for, you may have some difficulty finding a rental while in a Chapter 13. This tends to be most common in areas with high rental demand but relatively low rental availability, especially if you are looking for an uncommon size (for example, a 3-bedroom apartment in an area that has mostly studios and 1-bedroom apartments).  

I submitted my rental application but was denied. What can I do to get into an apartment? 

It’s true, it may be more challenging to find a property owner that is willing to rent to you if you have a bankruptcy on your credit report. Here are some tips that can help you when looking to find a new home or apartment.  

  • Often private property owners are more willing to lease to you than property management companies.  

  • This is because property management companies have strict policies they must follow for rental applications.  

  • If you choose to work with a property management company, ask If any of their property owners rent to someone who has a recent bankruptcy. This way you don’t waste money on an application fee for an owner who isn’t willing to consider your application. 

  • Show employment and income history to your potential landlord 

  • Provide a letter from your employer confirming your pay and list past employment 

  • Get references and rental history from your prior landlord. 

  • Ask your past landlord and roommates to write references for you that show on-time rent payments.  

  • Have someone co-sign for the lease 

  • If you have someone co-sign the lease agreement, it may help improve your chances of approval.  

You can rent after or during bankruptcy, but it may take some searching for the right property owner. Remember to be honest with potential property owners and keep your bankruptcy attorney informed of address changes.

If you have any questions about bankruptcy please feel free to contact our office and speak with one of our consumer bankruptcy attorneys.  We offer free consultations and will be happy to speak with you.

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