Many people in Missouri facing overwhelming debt find relief through bankruptcy. But a common concern after filing is securing housing. Will a bankruptcy filing prevent you from renting an apartment or home? The answer is no, you can still rent after bankruptcy in Missouri.
However, bankruptcy does impact your credit report, which most landlords use during tenant screening. This post explores what to expect when renting after bankruptcy and how to improve your chances of securing a place to call home. While a bankruptcy may pose some challenges, it's important to remember that it doesn't automatically disqualify you from renting. With careful planning and preparation, you can successfully navigate the rental process and find suitable housing.
The Impact of Bankruptcy on Rental Applications
Landlords use credit reports and other factors to assess potential tenants' financial capabilities and reliability. A bankruptcy filing will appear on your credit report for up to 10 years (7 years for Chapter 13). This can raise a red flag for some landlords, making the application process more challenging.
Here's a breakdown of how bankruptcy might affect your application:
- Lower Credit Score: Bankruptcy can significantly lower your credit score, which landlords often consider.
- Negative Perception: Landlords may view bankruptcy as a sign of financial instability.
- Increased Scrutiny: You might face more rigorous scrutiny of your income, employment history, and rental history compared to applicants without bankruptcy on their record.
- Potential for Higher Security Deposit: Some landlords may require a larger security deposit to mitigate perceived risks.
These factors can make it harder to get approved, but it isn't an impossible situation.
Factors Affecting Your Ability to Rent After Bankruptcy
Several key factors influence your chances of renting after bankruptcy in Missouri:
Rental History
A positive rental history is a significant advantage. On-time rent payments and maintaining good relationships with previous landlords can demonstrate financial responsibility and reliability. Additionally, a consistent rental history without gaps in occupancy can positively impact your application.
Tip: If you have a positive rental history, obtain a letter of reference from your previous landlord to strengthen your application.
Income Stability and Employment
Landlords prioritize tenants with stable employment and income sufficient to cover rent comfortably. Provide proof of income, such as recent pay stubs or a letter of employment. Additionally, demonstrating a consistent employment history with minimal gaps can enhance your application.
Tip: If self-employed, ensure your financial documentation is clear and organized.
Down Payment and Security Deposit
Being upfront with a larger security deposit or offering to pay a portion of the rent upfront can show your commitment and alleviate landlord concerns. Additionally, providing evidence of savings or a stable income source can further demonstrate your financial responsibility. Remember, the security deposit is typically returned at the end of the tenancy if there are no damages or unpaid rent.
Types of Bankruptcy
The type of bankruptcy you filed can also play a role in how landlords perceive your application:
Chapter 7 vs. Chapter 13
- Chapter 7: This type of bankruptcy involves liquidating assets to repay creditors. While it can provide a fresh financial start by discharging most unsecured debts, it can also result in a more significant drop in credit score. Landlords may view Chapter 7 filers with more caution due to the perception of severe financial hardship.
- Chapter 13: This bankruptcy involves creating a repayment plan to address debts over a period of three to five years. While it may take longer to complete, it can demonstrate a commitment to financial responsibility and debt management. Landlords may view Chapter 13 filers more favorably as they are actively working to repay their debts.
Remember: Bankruptcy laws are complex, and the impact of each chapter can vary depending on your specific situation. Consulting with an experienced bankruptcy attorney is recommended to understand the implications of your chosen chapter on your rental prospects.
When to Consult with an Experienced Bankruptcy Attorney | Debt Doctors of Missouri
If you're considering filing bankruptcy or already have and are facing difficulties finding housing, a bankruptcy attorney can be a valuable resource. They can help you:
- Understand Missouri bankruptcy laws and their impact on renting.
- Explore options for improving your credit score.
- Draft letters explaining the circumstances surrounding your bankruptcy to provide context to landlords.
- Develop strategies for overcoming potential rental obstacles, such as offering additional financial guarantees or providing alternative forms of creditworthiness verification.
- Negotiate with landlords on your behalf to increase your chances of securing housing.
At Debt Doctors of Missouri, we understand the challenges of navigating a post-bankruptcy world. We offer experienced legal guidance and support throughout the process. Don't hesitate to call us at (417) 466-3328 for a free consultation.
