How to Rent After Bankruptcy & Foreclosure

By Ciele Edwards

Bankruptcy and foreclosure have a devastating effect on your credit scores and your poor credit presents a problem when you try to rent a home. Landlords generally ask permission to review your credit reports before approving your rental application. Your credit history helps a landlord or property manager determine if you are likely to be a responsible tenant and pay your rent on time. Fortunately, you have rental options – even with credit damage as severe as a recent bankruptcy or foreclosure.

Explain Your Circumstances

If you know your credit doesn't meet the landlord's requirements, be honest about that fact. Explain the circumstances surrounding your bankruptcy and foreclosure and how your circumstances have changed. For example, if you lost your home to foreclosure, you could explain to the landlord that an unexpected job loss left you unable to pay your mortgage, but you have a new job and will be able to handle your rental obligations. Your prospective landlord may be willing to overlook your poor credit if he believes your credit problems were the result of circumstances beyond your control rather than poor debt management habits. In general, private landlords have the freedom to be more flexible with credit approvals than property management companies.

Prove Your Income

You can increase your chances of being approved for a rental property by demonstrating to your prospective landlord that you can afford the monthly rent. Most landlords will want to see that your rent does not exceed 40 percent of your income. Give your pay stubs to the landlord along with your rental application. Pay stubs demonstrate to your landlord that you not only have a steady job, but earn enough money to pay your rent without difficulty each month.

Get a free, confidential bankruptcy evaluation. Learn More

Get Letters of Reference

If proving a reliable income and explaining the circumstances behind your poor credit history aren't enough to sway the landlord, consider obtaining professional letters of reference. A letter from your employer verifying your employment and noting your positive performance on the job will show that you have a steady job and a high responsibility level – things landlords want to see. A letter of reference from a previous landlord noting that you always paid your rent on time and were a responsible tenant may prove even more beneficial because it answers the question your landlord wants to know most: Will you pay the rent?

Get a Co-signer

If a prospective landlord has strict credit policies and won't consider your circumstances, a co-signer who meets the landlord's credit requirements can help you get approved for housing. Like a co-signer on a loan, a co-signer on a rental application agrees to pay the landlord any rent or fees you fail to pay. In some states, the landlord is free to pursue your co-signer for payment without first trying to procure payment from you. Thus, it is imperative that you pay your rent on time, follow the terms of your lease and leave the apartment in pristine condition when you move out, lest your landlord hold your co-signer financially responsible for your mistakes.

Get a free, confidential bankruptcy evaluation. Learn More
How Can a Bankruptcy Negatively Affect My Life?
 

References

Resources

Related articles

How to Write a Financial Hardship Letter to Creditors

A hardship letter is a statement written by a borrower to a creditor describing a change in his financial situation. Many creditors require a hardship letter when the borrower requests financial assistance or alternative payment options. The letter should provide a detailed explanation of the type of assistance the borrower wants, the cause of the financial hardship and the current financial situation leading to non-payment of debt. Once a creditor has the full picture of the borrower's financial situation, he may approve an alternative payment plan, a temporary forbearance or other financial options.

Can a Bank Repo Your Car After You Retain a Lawyer for Bankruptcy?

Repossession and bankruptcy are ugly words for car owners. Both indicate that your finances are no longer under your personal control. While declaring bankruptcy is a remedy of last resort, it can provide substantial relief -- and under some circumstances, help avert repossession of your car. While the simple act of retaining a bankruptcy attorney won't foil the repo man, you may have options to remedy the situation.

What Happens if a Bank Discharges a Home Loan During a Bankruptcy?

At the end of a bankruptcy case, you will receive a bankruptcy discharge that relieves you of all financial obligations toward the debt. The discharge also applies to home mortgages. Depending on whether you file for Chapter 7 or Chapter 13 bankruptcy, and whether you are current on your monthly payments, you may have several options if you would like to keep your home.

Related articles

Negative Effects of Chapter 13 Bankruptcy for an Applicant

Although a Chapter 13 bankruptcy offers some positive outcomes, including uncomplicated repayment plans and the ...

How Does Bankruptcy Affect Homebuying?

Bankruptcy can give you a fresh financial start by allowing you to restructure or erase your debts under a ...

Can You Still Rent if You Have Already Filed for Bankruptcy?

Bankruptcy is a double-edged sword. On one hand, it relieves you of responsibility for debts you're unable to pay. On ...

Will I Receive Notice to Vacate After a Bankruptcy Is Discharged?

Your landlord may not automatically evict you from your apartment just because you sought bankruptcy protection from ...

Browse by category
Ready to Begin? GET STARTED