How Are Landlords Affected By BankruptcyFriday, April 29th, 2022, 7:50 pm
When you file for bankruptcy while renting a home or apartment, it is an excellent way to stay in control of any debt you have. The reason is that the property you are renting is not your asset. This means the property itself is not at risk, and it is not a liability in the bankruptcy that you are going through. So although you may be worried about the property being negatively affected, you don´t need to worry. The only thing that will have an adverse effect will be your credit.
Are Landlords Notified of a Bankruptcy?
When you go through bankruptcy while renting property, the chances of your landlord being notified are very slim. The only way the landlord would be a creditor is if you have arrears in your rent history. Then an official receiver would speak to them to settle the debt. Other than that, they would only find out if another credit check is run or you happen to let them know about it. However, this too may not occur even when renewing a rental lease.
Are You Able To Move To A Different Property To Rent
Going through bankruptcy may cause you to move to a new property that costs less to rent. This is perfectly ok and can be seen as necessary because of the bankruptcy. You just got to make sure that you are downsizing and not upgrading. You also need to keep in mind the amount you spend on rent unless your job will be increasing your salary. As debt payments are being made, you may be able to have your debts reduced to compensate for your rent increase. Regardless, this may only occur on certain occasions.
What Can You Do To Surpass Credit Checks To Rent Property?
As you plan to move to a new home, you may need a new credit check. You should know that your bankruptcy will be seen, and you may not be approved for a lease. To get around this hurdle, you can take advantage of two different methods. First, you can have a guarantor act on your behalf to make payments towards your rent. This will likely be acceptable for most landlords. The second option is to make advanced payments. Making advanced payments will likely require six months in total first. Your bankruptcy will probably not allow you to make this payment.
Going through bankruptcy while renting property is not a bad thing, as you may think. Having it only affect your credit score will keep you and the landlord happy. This is because the property will not be affected, and you will still be able to enjoy living in the rental. If you have questions, give us a call today to answer any questions you may have.
Category: Bankruptcy Law