How Bankruptcy Affects Renting a Home

If you are struggling with debt you cannot afford to repay, bankruptcy can act as a financial reset button. Unfortunately, the process has its own distinct challenges. People filing bankruptcy have many concerns, including whether they will be able to rent a home afterwards. While filing bankruptcy should not prevent you from renting a home, it can make the process more challenging. Below, our Florida bankruptcy lawyer explains in greater detail.

Bankruptcy and the Impact on Your Credit Score

 Bankruptcy will have a significant impact on your credit score. When applying for a rental unit, the landlord will likely run a credit check on you to determine if you have been consistent in making payments in the past. When you first file bankruptcy, your credit score will drop by approximately 200 points.

Additionally, a Chapter 7 bankruptcy will remain on your credit report for ten years while a Chapter 13 will show on your credit report for seven years. As soon as your bankruptcy case is finalized, it is critical to start rebuilding your credit to repair some of the damage bankruptcy does to it.

Why is the Rental Market So Competitive in Florida? 

Demand for rental units throughout Florida is very high and so, landlords can afford to be very selective. They can also charge rents that are quite high. The average cost of a one-bedroom apartment in Florida is between $2,000 and $2,500. In heavily populated areas such as Orlando, Tampa, and Miami, the cost of rent can be even higher. The fact that demand is so high can make it even more challenging for bankruptcy filers to obtain a rental unit.

How Can Filing Bankruptcy Impact Renting a Home? 

Again, the majority of landlords in Florida run credit checks on anyone who applies for a rental unit. Having a bankruptcy on your credit report does not necessarily mean that you will not be able to rent, but it can make the situation more challenging. For example, the landlord may charge you a higher security deposit to offset the risk, or they may require that you have a co-signer who will be responsible for the rent if you do not pay it.

How to Secure a Rental After Bankruptcy 

While bankruptcy can make it more challenging to secure a rental unit, it is not impossible. There are many strategies that can help you rent a home after filing bankruptcy.

One of the best ways to obtain a rental after bankruptcy is to have a reference from a previous landlord. The reference should state how much rent you paid previously and that you paid it regularly and on time. Additionally, showing that you have the necessary income to cover the amount of rent for a home can also help you secure a rental. If your landlord wants to negotiate, it is also recommended that you have strong legal representation.

Our Bankruptcy Lawyers in Florida Can Help 

While it is possible to rent a home after bankruptcy in Florida, there are challenges associated with the process. At Nowack & Olson, PLLC, our Florida bankruptcy lawyers can provide the legal advice you need to make life as easy as possible after filing. Reach out to us to schedule a consultation and to learn more.

Source:

uscourts.gov/court-programs/bankruptcy/bankruptcy-basics