Renting an Apartment After Filing For Bankruptcy

According to the U.S. Census Bureau, about a fifth of the Bucks County population are renters, while a similar distribution applies across Pennsylvania as a whole.  Considering 627,000 people call Bucks County home, that means approximately 125,000 people rent apartments and housing units. Because most landlords and rental companies conduct credit checks on their prospective tenants, having a bankruptcy in your past or present can impact your apartment search. What will give you the best chances of being approved to become a renter?

Can I Still Rent an Apartment After Bankruptcy?

Filing for bankruptcy does not automatically preclude you from being able to rent an apartment. That being said, bankruptcy can create some obstacles when it comes to persuading your potential new landlord that you will be a reliable tenant.  So how can you boost your chances of being handed that pair of keys?  How will you be perceived as a potential renter?

The answers to those questions are influenced heavily by the status and timing of your case.  If your case is currently ongoing, and you haven’t yet received your discharge, your landlord may be hesitant to consider you. However, if your bankruptcy is in the past, your landlord may arrive at several conclusions which are actually in your favor.  There are two primary reasons for this:

1. Time limits for multiple bankruptcies.  Debtors must wait eight years to file a second bankruptcy in consecutive Chapter 7 cases, and two years to file a second Chapter 13. Generally, there is a four-year limit when going from Chapter 7 to Chapter 13, and a six-year limit when going from Chapter 13 to Chapter 7.
2. Greater disposable income.  If a bankruptcy has been discharged, the logical conclusion is that the debts were paid off in order to obtain that discharge.  This means that the debtor — who is now relieved of many old financial obligations — has more disposable income than he or she used to.

How Employment History and Credit Score Impact Apartment Rentals

It’s important to remember that your bankruptcy does not exist in a vacuum, and landlords will consider the greater context of your overall financial situation.

For example, your employment history has a significant impact on your appeal as a prospective renter.  Your landlord’s primary concern is that you will be able to make your rent payments, which means that your employment will be closely scrutinized for any potential red flags.  Ideally, the “perfect” renter has a history of steady, long-term employment which is free of major gaps and lapses. From a landlord’s perspective, a tenant who is currently employed is going to be preferable to tenant who is unemployed, with or without a bankruptcy in the picture.

In conjunction with your employment, your landlord will also look closely at your credit history. (You should receive written notice informing you that the landlord is doing this, and that you have the right to dispute any information which is uncovered.)  Although bankruptcy has a temporary negative impact, in the long term, many former debtors find that their credit actually improves because they are no longer behind on their bills and other payments.

While the record of a bankruptcy will remain on your credit report for seven years (for Chapter 13) or 10 years (for Chapter 7), your actual credit score can start to improve in less than a year — provided you consistently meet your financial obligations.   According to Chris Bridges, who owns a credit reporting business, “It’s not uncommon for people to see their credit scores skyrocket up into the 700s, if they have absolutely no late payments or collections.”  Obtaining a secured credit card and paying your utilities in full and on time each month are both good strategies.

Our Philadelphia + Bucks County Bankruptcy Lawyers Can Help

The relationship between renting, homeownership, and bankruptcy can be very complex.  An experienced Philadelphia bankruptcy lawyer can help you navigate the filing process and protect your legal rights. To schedule a free and confidential case evaluation, call the law offices of Young, Marr, Mallis & Associates at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania, or contact us online today.