How Hard Will It Be to Rent an Apartment or House After I file Bankruptcy?
Many people delay filing bankruptcy out of fear that they will quite literally be unable to keep a roof over their heads. Some avoid bankruptcy altogether as a result of those fears. So let’s talk about whether those fears are justified.
Landlords routinely require credit checks of new tenants. That requirement goes right along with the rental application. And, of course, a bankruptcy will show up. There is no getting around that. Worse, there was a time when those facts could translate to homelessness. Literally, a family with a bankruptcy could find themselves in the street. I am happy to report that those times are long gone now.
Let’s begin by proclaiming that what was “then” is not “now.” The old, draconian practices are no more. That is true not only in theory. It is also true almost entirely in practice. Denying housing access on the basis of bankruptcy is almost entirely a thing of the past.
If Landlords Can Disregard a Bankruptcy, What DO They Care about?
What do landlords care about most, then? Landlords care about your current cash flow. That tells them a whole lot more about your ability to pay rent than does your bankruptcy. If you can show positive – or even break-even – cash flow, you almost certainly can be qualified to rent.
The Great Recession of 2008 and more recently the COVID-19 Pandemic have tended to impact landlord practices in somewhat different ways. But the sum of those ways has been a complete transformation of how landlords treat applicants who have filed bankruptcy. The reality of a “new normal” has taken root and has grown to bear fruit. There is now wide acceptance in American culture of the probable causes of a bankruptcy. Most of us by now realize that a filing is likely due to medical bills or involuntary layoffs, not irresponsible spending.
As a consequence, we can safely conclude that filing bankruptcy almost certainly won’t prevent you from being able to secure housing for yourself and your family.