One of the biggest deterrents people consider when considering bankruptcy is the adverse effect it has on their credit score, which in turn has a negative effect on their ability to rent an apartment. Many people often think of a nightmare scenario in which bankruptcy leads directly to homelessness, but this is simply untrue. It is true that bankruptcy can negatively affect one’s credit history for a period of time. But to what degree? Just how much of an effect does bankruptcy have? To learn these answers and more, read on.
It is important to understand how credit scores work. Major credit bureaus track all of your credit history. This includes your credit cards and how/if you pay them off, student loans, mortgages, vehicle loans, business loans, and more. All of the details the bureaus track are factored into a credit score. Many landlords request prospective tenant’s’ credit scores, so a bad credit score can be a liability.
What can you do?
Ok, so we’ve established that your capability to rent apartments could be reduced in the period after declaring bankruptcy. That by no means makes it an impossible task. It just means that you will have to take extra measures to demonstrate to landlords that you can pay your rent.
If you have steady work and a history of stable employment, that can be a huge asset. Take with a letter from your employer stating that you are in good stead with the company. If you have never previously been evicted and have a good history of paying your rent on time, then you should provide a copy of your rent payment records as well. If you have somebody willing to guarantee you as a co-signer, this will also greatly improve your chances of being signed as a renter.
Remember that there are multiple types of bankruptcy. To fully understand whether or not you should file for bankruptcy, and which type, you should speak with a bankruptcy expert like Kevin Thatcher. Depending on your needs, you may only need to consolidate your debt instead of filing for bankruptcy, which will allow you to better maintain your credit score and stay in good standings with future landlords.
For more information on your available options, contact our team today.