Anyone who has tried to rent a house or apartment lately in Denver, Colorado knows that rents are up and the rental market is tight. According to the Denver Post, apartment rents are at a record high with average apartment rents of $992, up $40 from this time last year.
While finding a place to rent is tougher for everyone, it can be especially hard for someone with bad credit or a bankruptcy on their credit report.
While renting can be difficult, it is not impossible, and many clients of Mile High Bankruptcy find places to rent after they file Chapter 7 Bankruptcy. The purpose of this blog post is to provide a few tips we have seen to help rent a place after filing Chapter 7.
First, you will probably not be able to rent from large corporate landlords—owners of large apartment complexes with many units nationwide. Because it is so competitive to get a place, these landlords can “just say no” to people who have filed Chapter 7. But, these same landlords won’t rent to you anyway if you have bad credit, so you are no worse off by having filed and eliminated your debts.
Because the big companies are so difficult, you will probably have the best luck renting from private landlords—some individual or small investment company that owns a few houses or apartment buildings. There are many such landlords out there, and our experience is that their number one concern in a new tenant is whether they have a dependable income, i.e. can you pay the rent.
So, if you have a steady job, or dependable income from social security or retirement or disability, the landlord knows you can pay the rent, and that helps in getting you approved.
In an interesting way, to such a landlord, a Chapter 7 bankruptcy is ACTUALLY AN IMPROVEMENT over bad credit on your credit report because it demonstrates to them that you have taken care of your debt problem responsibly, and, more importantly, that you are not vulnerable to creditor garnishments that might hurt your ability to pay the rent.
Another HUGE incentive for a landlord is whether you can pay several months rent in advance. This is sometimes possible after filing Chapter 7 bankruptcy if you can stay with family or friends for awhile after filing to save up enough to “buy your way” into a lease or if you can save money while living in a house while waiting for a foreclosure to be completed.
For example, if a person is giving a house back through a bankruptcy, files the bankruptcy right away, and lives in the house through the foreclosure period, they can often have housing in the house without paying rent for many months. If that person is disciplined and saves each month what he would have paid in rent, they can often move out after the foreclosure with several thousand dollars saved to put down on a lease.
In this case, if someone with dependable income approaches a landlord and explains that they filed a bankruptcy, but have solved their debt problems AND can pay six month’s rent in advance, this may often times convince a landlord to rent to them when they would otherwise say “no”.