Can I Rent an Apartment After Filing an Indiana Bankruptcy?

              While there is certainly no rule that you cannot rent after filing either a Chapter 7 or Chapter 13 bankruptcy petition in Indiana, it may also not be easy.  Of course, whether a landlord or apartment complex leasing manager decides to rent to you is their decision.  While landlords may not use such reasons as gender, age, or sex to discriminate against renters....they are allowed to use credit to determine to whom they prefer to rent.

               This is a very common question that people ask me when I meet with them regarding bankruptcy options at Halcomb Singler, LLP.  Of course, it is common for those meeting with me to be behind on a mortgage and worried about losing their home.  One of the biggest worries that most people who are behind on their mortgagees have is "where will I move if my house is sold at sheriff sale?"  This is a very good question and one that must be considered.

              What I often tell clients when they ask me about the potential difficulty of renting after filing bankruptcy is that it depends on where you are trying to rent.  It seems to me that Indianapolis apartment communities are the most difficult to rent from after filing bankruptcy.  Apartment communities receive many, many rental applications.  In an effort to make sure that the apartment is not being accused of discrimination regarding it rental practices, many apartment communities base decisions whether or not to rent heavily on credit score.  It is not uncommon for these communities to have a minimum credit score which one must have in order to rent at the community.  If your score is below the minimum then you are out of luck.  This process does not tend to go well for those who have just filed bankruptcy because, as you might imagine, bankruptcy decreases your credit score.

             Where I believe my bankruptcy clients might have better luck is by applying to rent a house from an individual.  I think it is important to be up front with the landlord and let him or her know that you have just filed bankruptcy.  Taking the time to be honest and answering any questions the potential landlord may have regarding why you needed to file bankruptcy may go a long way.  Plus, many landlords (even those who only own one rental property) may check your credit.  You don't want them to be surprised when they see a bankruptcy filing.  You never know, your landlord or a close family member of theirs may have needed to file bankruptcy in the past and may be receptive to helping someone get their fresh start.  It may also be that the landlord may understand that since you have already filed bankruptcy that if you now sign a lease that you cannot now file bankruptcy on the rent owed.

             Even though I believe smaller properties or even rental houses are a better bet for those looking to rent just after the filing of a bankruptcy, keep in mind that not everyone will rent to you and try not to get too frustrated or defeated.  There are a few things you can offer to do which may sway an otherwise reluctant landlord to rent to you in spite of your recent bankruptcy filing.  First, if you are surrendering a house in bankruptcy chances are that you have not paid the mortgage payment in several months.   This should help in your ability to get some money in your savings account.  Perhaps you can give the landlord some incentive by offering to pay the first two months (instead of just the normal first month) plus deposit in cash.  You may also want to explain that now that you have filed for bankruptcy protection that there are many bills you once had to make that you no longer must pay, which frees up additional money for your rent.  Finally, you may offer to turn over 11 post-dated checks to the landlord each dated the first day of the month for the term of a one-year lease.  This will allow the landlord to take a check to the bank each month that you have already written.  This way the landlord won't have to chase you down each month or wait for your rent to come in the mail.  But if you do this you better make sure you have enough money to cover the rent each month on the date of the check so you don't incur a returned check fee and probably a late fee from your landlord.

            The bottom line is that, although your bankruptcy filing will certainly make it somewhat more difficult to rent a home or apartment, it is not going to be impossible.  If you have more questions about what might happen if you file a bankruptcy in Indiana I am available.  I meet with potential bankruptcy clients for a one hour free consultation to discuss whether or not bankruptcy may be helpful in their situation and to answer any questions that they have about the process.  For those who do decide to file bankruptcy, we offer flat fees and payment plans.  If you would like to set up an appointment call our Carmel office at (317) 595-8222 or click here.  I represent those who live in the Indianapolis and surrounding areas in both Chapter 7 and Chapter 13 bankruptcy cases and can speak with you about both chapters.