When you file for bankruptcy, it can more difficult to do everything from get a cell phone to rent a house or apartment. However, even with a bankruptcy on your record, you can still get a lease; how difficult it will be depends on everything from when you filed bankruptcy to how much money you earn. You may have to go above and beyond to prove to potential landlords that you're not too great a risk.
You May Get Turned Down
According to MSN Money, landlords frequently check the credit history of all potential applicants, so if you have a bankruptcy on your record, the landlord will know. They'll also likely use it as a deciding factor in determining whether to approve your application, whether you're in the middle of bankruptcy or filed years earlier and have a solid credit history since then. Some landlords will only rent to you if your bankruptcy case is over, which takes about nine months for Chapter 7 and three years to five years for Chapter 13. Or a landlord may rent to you but not give you a long-term lease, instead opting for a month-to-month option.
You May Have to Offer Additional Income Verification or Have a Co-Signer
If landlords see you as a credit risk, they may require more than the standard rental application. In addition to checking your credit report, the landlord may ask for letters of reference from previous landlords and employers. Landlords may be more likely to rent to you if they know you have a history of paying your rent on time, and they'll also want proof that you earn enough to pay your rent without difficulty. They may also ask you to provide a co-signer--someone with good credit who will sign the lease with you and accept partial responsibility for the lease. According to Bankrate, it can be much easier to get a lease if you can find someone with good credit, such as your parents, to co-sign for you. However, you'll need to make sure your co-signer won't be required to sign again when you renew your lease.
You May Have to Pay More
Landlords are often more willing to take a chance on someone with bad credit if they have some guarantee of payment. Landlords usually require new tenants pay first and last months' rent, but if you have a bankruptcy on your record, they may require you pay as much as six months' rent before you move in. They may also require a higher security deposit than they normally request. If a landlord seems hesitant, offering a larger deposit may persuade him to rent to you or may prevent him from requiring you have a co-signer.
Your Current Landlord May Find Out
Bankruptcy filings are public record, so if you're already renting, your landlord could find out. However, your landlord is not notified and you're not required to name your landlord on your list of creditors. If your landlord does find out, she may choose not to renew your lease or may request the extra measures required of new tenants with a bankruptcy, such as paying several months in advance or only renting to you on a month-by-month basis.
Let me know if there is anything that I can do to asssit you in your new home search.
Fred Yancy, Broker