If you were considering filing for bankruptcy, you might be concerned about whether you will be able to continue renting your home or apartment. It may be challenging to purchase a home during a Chapter 13 bankruptcy or a Chapter 7 bankruptcy. Still, you should be able to rent an apartment or home. Renting during and after bankruptcy can be challenging, as well, however.. In some cases, people will resolve this concern by entering into a new rental or lease agreement before filing for bankruptcy. 

In other cases, a person may need to move into a new home while in a Chapter 13 bankruptcy or soon after their debt has been discharged. If you have questions about renting while going through bankruptcy, we recommend contacting one of the experienced Chapter 13 bankruptcy attorneys at Bankruptcy Law Center.

How Do I Rent During a Chapter 13 Bankruptcy?

Without approval from the bankruptcy court during a Chapter 13 bankruptcy, you cannot go into debt. However, a lease or rental agreement for an apartment or a home is not considered a loan agreement. You are promising to pay money each month to live in a house or apartment. You are not borrowing money through a mortgage. As a result, you will not need to get court approval to enter into a new lease or rental agreement. In other words, you are not borrowing money, so you do not need court approval to secure yourself a living space. You should consider a few different things while renting during a Chapter 13 bankruptcy case, however.

First, you should talk to your bankruptcy attorney. Court rules may require you to notify your Chapter 13 trustee before you enter into your new lease agreement. Ensure that your bankruptcy attorney has your new address whenever you move during a Chapter 13 case. It is essential that you ensure that you receive all notices and correspondence from your bankruptcy attorney, the Chapter 13 trustee, and the bankruptcy court.

Try to Keep Your Housing Expenses the Same

It is also important that you try to keep your housing expenses the same or lower, if possible. Suppose you change your housing expenses by moving into more expensive or less expensive housing. If you plan on signing a new rental agreement and your housing costs will decrease or increase, talk to your bankruptcy attorney as soon as possible. The Chapter 13 bankruptcy process itself will not impact any obligations created by your current or new lease. Suppose you sign the lease after entering a Chapter 13 bankruptcy. In that case, the bankruptcy case will discharge your liability for any missed payments. However, if you break the lease, you will still be liable to your landlord for any damages caused by the breach of contract.

Renting After Filing for a Chapter 13 Bankruptcy

Renting after filing for a Chapter 13 bankruptcy can be difficult. Many landlords will run a credit check on an applicant before entering into a rental or lease agreement. The purpose of running a credit check is to see how the applicant handles his or her money. Their credit check will show whether they make debt payments on time, have any bankruptcies, foreclosure, or debt collections on their credit report. Your bankruptcy will show up on your credit report for up to 10 years after filing. It is essential to be honest and upfront with a potential landlord. Remember, the landlord will find out about the bankruptcy, so discussing it upfront is typically the best way to handle the situation.

Suppose you have a bankruptcy on your credit report. In that case, you should be prepared to pay a higher security deposit fee. Some landlords will also require you to pay your first and last month’s rent and impose strict penalties for late payments. If any extenuating circumstances led to your bankruptcy, such as a sudden illness, job loss, accidental injury, or even the loss of a spouse, try to explain the circumstances to your landlord. If you have made the most of your fresh start after filing a Chapter 13 bankruptcy, try to keep your bills current, so your landlord can see that you have made a change after filing for bankruptcy. Many landlords understand that we are in a challenging economic climate. 

Tips for Renting a House After Bankruptcy

You may be interested in renting a home after a Chapter 13 bankruptcy. Finding a landlord willing to rent a home to you may be more difficult after a bankruptcy, but it is possible. We recommend asking questions before submitting your application to avoid wasting your or the landlord’s time. Ask the landlord whether he or she will rent to a person who has a recent bankruptcy before applying. If the landlord has a policy of not renting to people who have just completed bankruptcy, do not waste your money and time applying for nothing. 

It is also wise to provide a letter from your employer confirming that you are indeed employed and providing your pay rate. You may include a list of your previous employers with the dates of employment. If you do not have any gaps in your employment history, the landlord may be more likely to allow you to rent from them. Sometimes people will also include a letter explaining why they had to file for bankruptcy and how they have made a fresh start and changed their habits for the better. 

If you are having difficulty finding a landlord who will rent to you, consider searching out individual property owners who are not working within the constraints of corporate policies. A private landlord may be more willing to listen to your situation and make a case-by-case decision. You should also have your references ready, try to improve your credit score, and provide your rental history. You may want to include your rental history and consider having someone ready who will co-sign your rental agreement.