Life after bankruptcy is often frustrating, and life during bankruptcy can be extremely difficult. Filing Chapter 13 bankruptcy can negatively impact your credit, making it very difficult to obtain financing or even rent property. Particularly, it's harder to find places that take people with active bankruptcies than it is to find apartments that accept discharged bankruptcies.
If you need to find a new home or apartment to rent during Chapter 13, there are ways to increase your chances for success while minimizing stress. Options range from specifically seeking rental properties that accept bankruptcies to compensating with a co-signer or financial documentation showing your ability to pay.
Contact the Bankruptcy Trustee
Discuss the need or desire to move with your Chapter 13 trustee before you begin looking for owners or property management companies that accept bankruptcies. The trustee overseeing your Chapter 13 repayment plan is in the best position to determine how much rent you can currently afford.
Each month, the Chapter 13 trustee makes payments to creditors who are included in the repayment plan, and the trustee knows how much is left to repay and which creditors are nearly paid in full. Keeping the trustee informed regarding any major financial decision will help you avoid getting into further financial difficulty.
Aim for Smaller Complexes
Avoid applying to rent from apartment complexes owned by large property management companies. Large property management companies often have stricter financial qualifying guidelines. While a few will rent to someone who is currently in Chapter 13, the majority of property management companies want renters to have bankruptcy cases discharged.
Even though large apartment complexes might advertise free rent specials and other tempting discounts, being in Chapter 13 greatly reduces your chances of qualifying for these specials. Instead, look for small complexes with a private owner.
Rent From Friends
Approach private property owners who know you or who are willing to work with you. Ask coworkers, friends and even relatives if they have or know of any houses or privately owned apartment complexes available to rent. Property owners who know you personally, or who have received a personal recommendation from someone who knows you, will be more willing to rent to you regardless of your Chapter 13 bankruptcy status.
Get a Co-Signer to Help
Having someone close to you offer to co-sign the lease can help persuade a property owner to rent to you during a bankruptcy. This person would have to pay your monthly rent if you became delinquent, so the property owner would have the assurance of this backup option.
Tell Your Story
Be willing to discuss the details of your Chapter 13 case and repayment plan with strangers. Submitting a rental application with a non-discharged bankruptcy is bound to raise questions. Many property owners do not know much about the bankruptcy process, and will be concerned about your ability to pay rent on time.
Explaining that Chapter 13 bankruptcy means that you are paying all past debt under a court-managed repayment plan that cannot have additional debt (including unpaid rent) added to it will often help set a potential landlord's mind at ease.