Bankruptcy should not necessarily prevent you from renting an apartment as there are several considerations a landlord must make with respect to denying or accepting your rental application.
Reporting a Bankruptcy – The Effect It Has on Your Credit Score
Because a bankruptcy must be reported to the major credit reporting bureaus, it will remain on your credit report for seven years and will negatively affect your score. As property management companies typically require that you fill out an application and provide your credit information, this factor alone would not make renting an easy proposition. However, items, such as your credit score or a previous bankruptcy, are not the only factors weighed with respect to renting. Landlords must also assess your qualifications based on length of employment, lease payment history, number of evictions and current income.
Therefore, in addition to any bankruptcy filings, the property management company or landlord also considers your employment history. If you’ve been on the job steadily for quite a while, then a bankruptcy would not necessarily rule out the possibility of your renting an apartment. However, if you’ve been working in a temporary job, even for a long period of time, or have been permanently employed for less than a year, then a bankruptcy could definitely hurt your chances. Also, if you’re unemployed or have previously filed for unemployment, a bankruptcy would just be an added mark against you.
Lease Payment History
The landlord or property management company, as stated, will also look at your lease payment history. If you’ve rented in the past and made regular payments (which you can back up with cancelled checks or receipts), then filing bankruptcy would not necessarily keep you from securing an apartment. If you’ve consistently made your rental payments, this factor alone may override any bankruptcy.
Number of Evictions
In addition to your payment history, the potential lessor will also consider any past evictions. If you’ve had no previous evictions, the landlord or management company may be less influenced by a filing for bankruptcy.
Finally, if you’re making an adequate income, then having a bankruptcy should cause the landlord to look at your rental application with some objectivity, although this isn’t always the case. Nevertheless, if you’ve been making a steady income for at least two years with a permanent employer, a bankruptcy does not necessarily have to be a regarded negatively.
Consequently, if you have a good rental payment history, no previous evictions or are making an adequate, regular income with a permanent employer, a bankruptcy may be regarded with more leniency. On the contrary, the legal proceeding may be viewed as your attempt to manage your debts and circumvent future financial problems. If all the criteria show that, for the most part, you’re reliable, then the landlord can also look upon a bankruptcy as a guarantee that your rent will, in all probability, be paid. In such cases, he’ll probably ask that you obtain a co-signer or pay a higher security deposit. Therefore, a previous bankruptcy can be a boon, if you meet all the other requirements, with respect to renting.