Written by Jeena Cho, San Francisco bankruptcy attorney

If you are considering bankruptcy, it’s natural to wonder - “Where will I live” and “Who will rent to me after I file?” Oftentimes, this conversation will come up with clients who are facing foreclosure. It’s also a topic of conversation with clients who are currently renting, but are considering moving in the near future. Here are some suggestions.

1. Consider renting now. Depending on your credit, it may be easier to find a place to rent before your bankruptcy. However, it can make more financial sense to live in your current home - mortgage free for as long as you can and sock away the savings. For many clients facing bankruptcy, the time you can get out of your home living mortgage free will be the only “gain” you’ll ever see from the home. Often times, it can take months (frequently 12+ months) before the foreclosure.

 

1. Consider renting from an individual landlord. It’s oftentimes much easier to rent from an individual landlord who are much more likely to rent to someone they “like” than a corporate management company that can put much more weight to the individual’s credit report. Be ready with documents to show your future landlord that despite having filed for bankruptcy, you will make the rent payment. Have your pay stubs handy, bank statements, and references from your former landlord.

 

1. Ask around. Put out the word to your friends, family and everyone you know that you are looking to rent. Just like finding a job, oftentimes, it’s all about who you know.

 

1. Throw money at the problem. As soon as you make the decision to file for bankruptcy, start putting away as much money as possible. You can make many problems better by throwing money at it. If you find a place you like, but the landlord is hesitant to rent to you because of your prior bankruptcy, sweeten the deal by offering double deposit, or offering to pay for several months of rent up-front.

 

Bottom line, it may be more challenging to rent after bankruptcy, but think about it this way. If you were the landlord and you had two applicants: 1) someone who did not file for bankruptcy but had $80,000 of credit card debt with missed payments or 2) someone who filed for bankruptcy and had no debt, who would you choose? Maybe I’m biased, but all things being equal, it would be an easy decision for me.

Image credit: hownowdesign

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