Given the choice, many of those filing chapter 7 would choose debt relief over a lot of other things. You might not have to make those choices, though. In many cases, the effects of chapter 7 on your personal financial picture are not as bad as you might fear. To find out how signing a lease on an apartment or home could be negatively affected by a filing, read on.
Impacting Your Credit
There are too many factors at play to make the assumption that declaring chapter 7 will ruin your credit. However, one sure way to ruin your credit is to avoid filing as long as possible. The way chapter 7 affects your ability to do things like lease an apartment, buy a car, and obtain a new credit card varies and depends on factors like your income, employment stability, cash on hand, assets, time at the same address, and more. While no one can say, for sure, that chapter 7 will wreak havoc with your credit, the way it does affect your credit picture tends to decrease as time goes on. You might be surprised, for example, to be offered new credit immediately after your final bankruptcy discharge.
Leasing Property: What Is Required?
Each property management company and landlord has its own set of requirements, so don't just assume you won't be approved for leasing. When it comes to paying rent, you are not dealing with a normal creditor, and they may not be as interested in your credit report as you think. Often, they will look for evictions or court judgments, though, because those things directly apply to leasing. Here is what else to know about leasing after bankruptcy:
- It's better not to try to lease while your bankruptcy is still active.
- Some require renters to be a number of years past bankruptcy.
- Private landlords may be less exacting in their standards.
- Your score will gradually rise after your discharge as time passes.
- If you are considering filing bankruptcy and a move is in your future, you might be better off moving before you file.
- Showing that you have stable employment and income coming in may be more important than your past bankruptcy.
- Apartment complexes tend to have lower credit standards than property managers of single-family homes. They also require lower deposits.
- It's never a good idea to put off an inevitable chapter 7 filing. Doing so only causes more problems with your credit when creditors take action to garnish your income, put liens on your property, foreclose on your home, repossess your vehicle, and more.
To find out how the value of a chapter 7 filing outweighs your fears of post-bankruptcy issues, speak to a chapter 7 bankruptcy attorney.
