Paying rent is, unfortunately, a part of life. Finding apartments that accept bankruptcies can be difficult, especially as you’re trying to rebuild your credit. This task is not impossible, but it may feel that way at times. This can feel like a daunting task for people who are unfamiliar with how bankruptcy affects credit and what prospective landlords look for in a future tenant.
At Eric Wilson Law, we can help you through every step of this overwhelming process. From figuring out which type of bankruptcy is right for you to how to find apartments that accept bankruptcies, we cover all the bases. For more information about how Alabama bankruptcy attorney Eric Wilson can help you, call us today at 205-349-1280.
Why Is It Difficult to Rent After Bankruptcy?
Bankruptcy may give people a fresh start, but many creditors and lenders see this as a negative mark on your credit history. But landlords aren’t creditors or lenders, so why is it so hard to rent after bankruptcy? The answer lies within your credit history. Your credit score gives an insight into your “credit worthiness,” or how likely you are to pay off your debt. With the stain of bankruptcy on your credit report, many renters find themselves denied immediately. Finding an apartment after bankruptcy (and continuing life after bankruptcy) may seem like a daunting task, but it’s far from impossible. Knowing what prospective landlords and apartment complexes look for can improve your chances of finding a great apartment.
Can I Rent With Poor Credit?
You don’t have to have good credit to find a rental, but it can definitely help smooth the process. If you have poor credit or negative marks on your credit history, you may have to go through a few extra steps to prove that you can pay rent. Renting with poor credit can come with strings attacked. Poor credit can mean higher security deposits, more rent upfront, and it may mean that you can’t rent in your ideal neighborhood.
How Your Bankruptcy Status and Credit Report Will Affect Your Ability to Rent
Bankruptcy can help you and your family out of a financial crisis caused by overwhelming debt, medical bills, or job losses. Unfortunately, many prospective landlords see bankruptcy as a risk on your credit report. One of the many myths surrounding bankruptcy is that people who file for bankruptcy are financially irresponsible. This is simply not true. Bankruptcy has many benefits, but overcoming this is a hurdle many prospective renters have to go through.
Bankruptcy Filing Date and Renting an Apartment
Your bankruptcy filing date can affect your chances of renting an apartment. Your bankruptcy case status can also affect your ability to rent as well. While you’re in the process of filing bankruptcy, it can be extremely difficult to find a rental. This is because when you file bankruptcy, an automatic stay goes into place. This stay prevents lenders and creditors from asking for repayment. During a Chapter 13 bankruptcy case, unpaid rent is considered unsecured debt, so it can often be discharged during the bankruptcy process. Waiting until your bankruptcy case is over can increase your chances of renting, since any debt you incur after filing bankruptcy cannot be discharged.
Your Credit History and Renting an Apartment
Bankruptcy may stay on your credit report for seven to ten years, but that doesn’t mean you have to wait that long to get credit or rent an apartment. As part of your rental application, you’ll submit to background and credit checks. Prospective landlords will look at your payment history and see whether or not your previous lease agreements were paid as agreed. Your credit score often isn’t the be-all-end-all of the process. Someone with a very low credit score may have on-time payments and glowing references from previous landlords. Someone with a moderate to good credit score can have a history of late payments and broken leases. No matter what your situation is, there are always ways to increase your chances of renting after bankruptcy.
Improve Your Chances of Finding a Home After Filing Bankruptcy
Finding a place to rent after bankruptcy may be difficult, but it’s certainly not impossible. If it was impossible, no one would ever file for bankruptcy! Bankruptcy filings may have decreased over the past few years, but still over half a million people filed bankruptcy in 2020. At Eric Wilson Law, we’ve helped thousands of families and individuals get back on their feet and out of crippling debt. Follow the tips below to increase your chances of finding a home after filing for bankruptcy.
Go the Private Route
Many apartment complexes are run by corporations and large businesses, which means they are often subject to corporate policies. These corporate policies treat you as a number, not as a person. A private property owner or landlord may be more open to renting to someone with a poor credit score after bankruptcy.
Write a Letter
Submitting a rental application can be a very impersonal process. The rental application will only have the objective facts of your situation, which don’t always explain the full picture. Consider writing a letter and including it with your application. You can explain the reason why you filed for bankruptcy and how you’re in the process of rebuilding your life.
Use Employment History
If you have a stable job, use your employment history to your advantage. The longer you’ve worked for your employer, the more stable you’ll appear in the eyes of a prospective landlord. If you can prove you have a steady income, landlords and apartment complexes will be more likely to see you as a reliable tenant.
Search for “No Credit-Check” Apartments
No credit-check apartments do exist! These apartments may not have all the amenities you would like or be in the location you want, but a short lease in a no-credit-check apartment can help you gain a history of timely rental payments and work on building your credit.
Provide Proof of Timely Rent Payments
Providing proof of timely rent or lease payments can be the thing that sways your prospective landlord. If you have a good relationship with your previous landlords, you can even ask them for a reference for your new living space. One of the biggest things prospective landlords look at is your rental history. If you have a history of late payments or breaking leases, you may have to jump through a few extra hoops to prove that you are now a reliable tenant.
Find a Cosigner
In some cases, an apartment complex will let you co-sign a lease with someone who seems less ‘risky’ in their eyes. This could be a parent, family member, or friend. A cosigner will be responsible for your rent payments if you don’t pay them in a timely manner.
Pay a Larger Security Deposit
After Chapter 7 bankruptcy, you’ll likely have a bit more disposable income to use. You can offer to pay a larger security deposit or provide a couple of months’ rent upfront to increase your chances of renting. A larger security deposit will show the prospective apartment complex or landlord that you aren’t going to suddenly stop paying rent or leave before the lease is over.
Improve Your Credit
Improving your credit score can show your future landlords that you are back on the right path. At Eric Wilson Law, our Alabama bankruptcy attorneys can help you learn good credit habits and increase your credit score. This process is different for everyone, so we can provide one-on-one credit counseling to help you fix your credit report.
Renting After Bankruptcy FAQs
Is Bankruptcy Discrimination Illegal?
Many people can’t help the fact that they are in over their heads in debt and have to file for bankruptcy. Unavoidable situations can and do force people into bankruptcy. Medical debt affects millions of people in the United States, and this life-or-death debt can quickly lead to bankruptcy. Because of this, it can seem like bankruptcy discrimination is unfair. Landlords and apartment complexes are private entities, so they can deny rental applications based on bankruptcy filings. Government agencies cannot discriminate based on bankruptcy filings.
How Soon Can I Rent After Bankruptcy?
Some bankruptcy cases can go on for years, but many filings resolve in a few months. Many people find luck renting after three months. This is because most people receive their bankruptcy discharge after three months.
What Will a Landlord Look For in My Credit History?
When you submit a rental application to a landlord, they’ll look for a few different things before approving or rejecting your application. Landlords check your credit history to look for evictions, lawsuits, late payments, and anything else that may indicate that you won’t pay your rent on time. This is why it’s important to be able to explain any past inconsistencies in your credit history.
Get Help From a Tuscaloosa Bankruptcy Lawyer
Many people put off filing bankruptcy because they are afraid they will lose assets like their house, car, and worldly possessions. Eric Wilson Law is a debt relief agency, and we have helped Tuscaloosa families and residents regain their financial footing through bankruptcy. Working with an experienced bankruptcy attorney can help you find financial freedom and manage overwhelming debt. We can help you through every step of the process and help you develop better credit habits for the future. Call us today at 205-349-1280 to schedule a free consultation with a skilled bankruptcy lawyer at Eric Wilson Law.