Renting an Apartment After Bankruptcy

When you file for bankruptcy, there’s no hiding it—the filing will appear on your credit report for seven to ten years. And there’s no denying that the bankruptcy will impact your ability to rent an apartment or house after your bankruptcy case ends. Still, a landlord might consider mitigating factors when deciding whether to rent to you. Here are some strategies that could increase your chances of renting a home after bankruptcy.

(Find out about other post-bankruptcy credit issues in Improving Credit After Bankruptcy.)

Available Income

Potential creditors don’t always consider bankruptcy a bad thing. In fact, many car loan lenders and credit card companies will eagerly extend credit to a borrower who wiped out (discharged) debt in bankruptcy. Creditors realize that it’s likely that you have more disposable income now that you don't have a hefty credit card payment. Also, the timing rules regarding multiple bankruptcy filings will prevent you from discharging debt for quite some time.

Some landlords think similarly. In fact, a landlord who owns the property you want to rent (as opposed to a rental agent) will be more likely to listen to your personal story and consider some of the same factors. Such a landlord will be more interested in how much money you have to pay the rent rather than the fact that you filed for bankruptcy.

Employment History

Another factor the landlord will likely consider is job stability. Along with your employment history, the landlord will probably be interested in the following:

• length of time at your current job (the longer you were employed, the better)
• permanent employment (as opposed to a seasonal or temporary position)
• previous employment history (including employment gaps)
• rate of pay, and
• wage history.

It’s likely that the landlord will compare how you handled finances with the income available to you before filing for bankruptcy to your current debt-to-income ratio.

Bankruptcy Case Status

If your bankruptcy case is still ongoing, meaning that you haven’t yet received a dismissal or discharge, then a landlord will be naturally reluctant to rent to you, especially if you’re in a Chapter 13 case. If you have to get the new debt obligation approved by the court, the landlord might not be willing to wait.

Although most landlords won’t be eager to rent to you if your Chapter 7 case is still pending either, a savvy landlord will at least understand that any debt you incur after the date you filed for Chapter 7 bankruptcy will remain your obligation to pay.

(Learn more about bankruptcy types in What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?)

Bankruptcy Filing Date

You can count on the fact that the landlord will look at the date that you filed for bankruptcy, and many will be hesitant to rent to you during the two years immediately following the bankruptcy case.

Fortunately, as time passes, the bankruptcy will have less impact on your ability to rent—especially if you’ve handled your finances responsibly and taken steps to clean up your credit report (more below).

Credit History

You can count on a landlord pulling your credit report even if you’ve haven’t filed for bankruptcy. The landlord will look for issues such as:

• evictions
• lawsuits or judgments
• repossessions, and
• late payments or defaults on other debts, such as credit cards.

If it appears that you’re still having problems meeting your financial obligations, it’s unlikely that your application will be approved.

Improving Your Chances of Renting After Bankruptcy

These tips might help you persuade a landlord that you’re a sound rental risk.

• Present rent payment records. If you can show that you didn’t break your leases or rental agreements with other landlords before the bankruptcy and that you consistently made rent payments on time (try using canceled checks and receipts or letters from prior landlords), then a bankruptcy might not matter so much to a potential landlord.
• Explain your situation. Most people file for bankruptcy due to circumstances beyond their control, such as an illness, divorce, death, or job loss. If this was the case for you, explain the events leading up to the bankruptcy, and why those conditions aren’t likely to happen again.