Renting a Home After Bankruptcy: What You Need to Know

Recovering from bankruptcy can be a long road, both financially and emotionally, but it is possible. One of the biggest concerns people have during this period is whether or not they’ll be able to rent a home. Fortunately, the answer is often yes. If you’ve declared bankruptcy in the past, and you’re interested in finding yourself a lovely house or apartment to rent today, here’s what you need to know:

Renting and Your Post-Bankruptcy Life

Just because you filed for bankruptcy doesn’t mean you’re unable to rent a home for the rest of your life. While it’s true that it may present some challenges during the rental search, you can’t give up hope. There are dozens of ways to enhance your applications and make the likelihood of finding a place worth renting much higher. Here’s what you’ll need to consider as you begin searching for rentals in your area:

Disposable Income

While it may seem backward, being bankrupt can occasionally work in your favor when applying for credit. Some lenders look at people who have filed for bankruptcy and assume that they have more disposable income since they’re no longer required to pay discharged debts.

Your potential landlord might regard your disposable income the same way. In most cases, a bankruptcy filing on its own isn’t enough to rule you out from a rental property. More often, landlords are interested in how much disposable income you have and how much of that you’ll need to pay your rent.

Assuming your disposable income levels are high enough to provide a comfortable cushion around your monthly rental fees, your landlord is likely to overlook your bankrupt status entirely.

Employment History

Just like disposable income is important, so, too, is work history. With all renters, regardless of whether they’ve ever filed bankruptcy, landlords want to see a long history of positive employment experience. Good employment history typically means you’ve been with your current employer for a long time. This shows that you’ve held work steadily over the years, and you have demonstrable wage history.

These things brand you as a reliable renter. This makes it more likely that a landlord will let their property to you.

The History of Your Bankruptcy Case

Landlords and lenders both are likely to look at variables like the current status of your bankruptcy case (whether or not it’s been discharged, for example), and how long ago you filed for bankruptcy. Landlords may also be interested in how many times you’ve filed for bankruptcy. They want see if this is a pattern in your life.

Your Rental History

Your rental history will make a big difference in the process of trying to find a place to rent. Landlords want to see that you always made your rent payments on time. They also want to make sure you don’t have a history of being evicted or breaking rental agreements. Because of this, it’s likely that your would-be landlord will ask for references to check your rental history.

Renting After Bankruptcy is Possible

Now that you know what landlords will look for from post-bankruptcy renters, take proactive steps. Start gathering documentations like rent payment records, credit history, and more. These simple steps can bolster your rental application and make finding a place to rent easier than you ever imagined it could be.