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I am in a spotty financial situation and trying figure out the next move and would like some advice from my peers. I lost my job and was subsequently evicted from my apartment in March 2015. I thought I had enough money saved and enough time to get my rent together before court proceedings but I just couldn't do it.
Now I have an eviction.
I was lucky enough to get a place immediately after, I found a new job with a solid company and I'm making efforts to get my finances back on track. I am considering bankruptcy as I have a considerable amount of debt after I lost my job.
I know landlords have heard my story a million times and try are protecting their investment by doing automatic denials on my applications becUse I have eviction, will filing bankruptcy add insult to injury? Should I repay the judgement before I file to show good character? will landlords consider my application after bankruptcy If I show satisfied judgement for eviction or should I just file and try to rebuild? I know eviction will pretty much warrant a denial in most cases and is public record and will be seen even I file for BK but I can begin rebuilding my credit immediately and start saving money for high deposits. I'm wondering if BK + eviction will make me a doubly undesirable applicant and if my chances of renting again will be totally shot to *****.
Thanks in advance for your responses, I am most appreciative.
The eviction alone will be held against you for 5-10yrs.. cant see the BK making much of difference rental wise, but your credit will be in the toilet for at least 10 yrs.
Think long and hard about filing BK...can't you increase your income to pay off the bills instead of ruining the last shred of your credit? Some people here, well one, will tell you that filing BK will dramatically improve your life and make everything or sunshine and roses.....it won't. Think about it
Bankruptcy means you opted to not pay your debts, the eviction or bankruptcy alone are deal breakers by themselves for me. There are always options though you just have to find them and make the sacrifices that come with them. Filing now would actually be a slight improvement for a landlord, you can't file again anytime soon, but really in most cases you will be in no worse situation since you forced your landlord to waste time and money taking you to court already.
It amazes me that in the internet age people still force landlords to take them to court instead of just moving out. You lose HUGE for the rest of your life by not leaving so just pack and get out because that is the end result anyway.
Just assume at this point that most reputable professional property managers will not rent to you with the eviction, regardless of whether you file bankruptcy or not, at least for the next decade (evictions stay on your record for life, but many landlords start to disregard them if they are 10+ years old).
So you are looking at renting from either family, slumlords or people who aren't professional landlords.
Family and Slumlords won't care whether you've filed bankruptcy or not.
When it comes to single property owners, they come in 4 styles:
1. Those who still check credit and backgrounds. These would be unlikely to rent to you whether you file bankruptcy or not, just like professional landlords.
2. Those who don't check anything, but rent to someone they like, or anyone who applies. Like slumlords, these would not care whether you filed bankruptcy or not, because they wouldn't know unless you told them.
3. Those who check backgrounds, but not credit. Like #1, they would be unlikely to rent to you with the eviction.
4. Those who check credit, but not backgrounds. This is the category you would be creating a problem with by filing bankruptcy. They may not know you had an eviction, so might be willing to rent to you if you had paid your prior landlord and showed a mature attitude toward your debt. But if you filed bankruptcy, in large part (which would be obvious by the timing) to avoid paying a landlord, then landlords in this category would deny you.
So the question is, would you be willing to rent entirely from slumlords or family until 10 years have passed and the bankruptcy drops off your credit report? Or do you want to maintain a chance to rent from some individual property landlords?
Bankruptcy means you opted to not pay your debts, the eviction or bankruptcy alone are deal breakers by themselves for me. There are always options though you just have to find them and make the sacrifices that come with them. Filing now would actually be a slight improvement for a landlord, you can't file again anytime soon, but really in most cases you will be in no worse situation since you forced your landlord to waste time and money taking you to court already.
It amazes me that in the internet age people still force landlords to take them to court instead of just moving out. You lose HUGE for the rest of your life by not leaving so just pack and get out because that is the end result anyway.
Yeah, I wish I would have did that in hindsight. I was trying to do everything in my power to keep my apartment but by the time I got to court they took off my rent concession and added a bunch of fees. My rent was $704 with concession, originally $900 per month with $15/day late fees and attorney I was looking at 2k for one month of rent, then would have to turn around and pay again (next month rent) I had my rent+ late fees for the month in hand, but atty fees killed me and I had to take the loss. Nobody cares about that though and my story is not different than anyone else that lost their job, got a new one and tried their best to bounce back but came up short. I just wasn't smart enough in the moment to get out before I got evicted.
Yeah, I should have moved out before I got evicted. I thought I had enough time to pay. I didn't. My situation sucks now and it's my responsibility to make the best move for myself going forward.
Just assume at this point that most reputable professional property managers will not rent to you with the eviction, regardless of whether you file bankruptcy or not, at least for the next decade (evictions stay on your record for life, but many landlords start to disregard them if they are 10+ years old).
So you are looking at renting from either family, slumlords or people who aren't professional landlords.
Family and Slumlords won't care whether you've filed bankruptcy or not.
When it comes to single property owners, they come in 4 styles:
1. Those who still check credit and backgrounds. These would be unlikely to rent to you whether you file bankruptcy or not, just like professional landlords.
2. Those who don't check anything, but rent to someone they like, or anyone who applies. Like slumlords, these would not care whether you filed bankruptcy or not, because they wouldn't know unless you told them.
3. Those who check backgrounds, but not credit. Like #1, they would be unlikely to rent to you with the eviction.
4. Those who check credit, but not backgrounds. This is the category you would be creating a problem with by filing bankruptcy. They may not know you had an eviction, so might be willing to rent to you if you had paid your prior landlord and showed a mature attitude toward your debt. But if you filed bankruptcy, in large part (which would be obvious by the timing) to avoid paying a landlord, then landlords in this category would deny you.
So the question is, would you be willing to rent entirely from slumlords or family until 10 years have passed and the bankruptcy drops off your credit report? Or do you want to maintain a chance to rent from some individual property landlords?
Good points, thanks for outlining the options and kind of what to expect. I'm currently looking at condos, wondering if using a realtor for rent by private owner condos could be a viable option for me in another year or so after I get my credit together? I am in an apartment now, wondering if I would be better off staying here and making the best of my situation.. Wondering if positive rental history for the next year or so will make any difference in making me appealing to landlords as a tenant? I m
Last edited by Chips N Dip; 03-06-2016 at 05:08 PM..
Reason: Typo
From a retired manager's perspective, my job was to minimize risk. Someone with a bunch of debts and unpaid judgments is a bankruptcy waiting to happen. Which means, that if you get behind on rent with me, you can add the debt you owe me to your bankruptcy. And, you can delay an eviction by filing bankruptcy.
So, for me, I would rather have a dismissed Chapter 7 on your credit report. If your bankruptcy is already dismissed, and it was a Chapter 7 (Chapter 13 BKs basically remain open, and can be converted later to a Chapter 7, so they are also a risk), I would be more likely to rent to you.
I wouldn't care about any stories you told me about how good you are to be paying off your debts. In one ear and out the other. All I see is the glaring possibility for you to add the owner's name to your bankruptcy and a delayed eviction, possibly a destroyed rental - and no way to collect.
So, I suggest you file your Chapter 7 now. A year after it's dismissed, many landlords and property managers will rent to you, and you'll start getting opportunities to apply for credit so you can build up your credit again. The Chapter 7 will stay on your report for 10 years, but your score can be back up in the 700's and above within just a couple years of BK.
If you just try to pay off the debt, or file a Chapter 13, remember, that until those debts are totally paid off, your credit will be terrible. Then, the debt stays on your report for another 7 years - after you finish paying it off. The 7 years for something to fall off your report begins after your last payment.
Regarding judgments. A judgment can be renewed every 10 years. And, they keep adding fees, so the amount keeps growing. And, once they have a judgment, they can put a lien on your bank account. Surprise! One day, your bank account is empty and you also owe the bank a "lien fee" of around $150. They can also garnish your wages.
So, which looks like the better option to clean up your mess?
I had to file a Chapter 7 in 2014. It was dismissed in August 2014. My credit score is already back into the 700s. When I apply to rent, I'm just asked if it's dismissed and was it a Chapter 7.
Landlords also look at the debt to income ratio. With a dismissed Chapter 7 your debt is zero.
Also, you should know that if you file BK, if you make any type of payment or reaffirm the debt you owed to anyone, it renews the entire debt. So, don't do that.
And yes, judgments are included in the BK. They would also go away.
Filing bankruptcy is legal. It is there for people like you who ended up in a mess. It's a second chance. Why not take advantage of something the government says you have a right to?
As far as the eviction, that would be a no-go for me, sorry to say. Perhaps you'll get lucky and it won't show up on an eviction report. In my opinion, the eviction will be much harder to deal with as far as getting approved than a dismissed Chapter 7 bankruptcy.
I suggest you file Chapter 7 BK now. Stay where you are, because stability as a renter will also be in your favor. Time will be your friend.
Good luck. By the way, if you can follow directions and have the time, you can file your own BK. I did.
I have people with evictions and bankruptcies contact me all the time...for half million dollar rental properties...Actually most of these people don't even make enough to cover the rent with their gross income, but for some reason they call me, cheerfully ask when they can come view it, as if I just drive around town to do tours for any random person who calls me without a question asked to see if they even qualify.
At this point I ask them about their income, credit and background and this is where the sob stories begin. The guy, we'll call him Carlos (his name was Carlos) said he had an eviction from three years ago down in Texas but it was their first apartment and they got evicted in the first month and it was the property managements fault, and he is going to pay them back.
So I ask him, if you are going to pay him back, why haven't you done so in three years since? And do you think the fact that you got evicted your first month into your first apartment ever, is somehow going to convince me that you were a great tenant loved by all the neighbors and didn't have loud parties or seedy people? Suffice it to say, he didn't get the house, on credit alone (even though his income was not enough anyways).
I think for a lower end rental, as was stated, you can find a property owner that if you are EXTREMELY polite, respectful, etc. he may give you a shot. But don't mess it up. I doubt that you will, you seem fairly on the ball and respectful, and you tried to get it together before eviction and did, but the fees killed you.
I personally would not rent to anyone with evictions or bankruptcies or serious criminal records (or any really probably) that come up at any point in their history. It's just a risk management thing. You have been a problem in the past for someone, you are more likely to be a problem for me, and I have lot's of people without the risk to rent to. Add to that they have skin in the game since they want to keep their credit clean, and I have a bit more leverage than someone who has nothing to lose record wise.
If you just try to pay off the debt, or file a Chapter 13, remember, that until those debts are totally paid off, your credit will be terrible. Then, the debt stays on your report for another 7 years - after you finish paying it off. The 7 years for something to fall off your report begins after your last payment.
Not true at all. Negative information is only allowed to be on your credit for 7 years from the first occurrence, first late payment normally with some exceptions (Nolo has good info on this topic).
Regarding judgments. A judgment can be renewed every 10 years. And, they keep adding fees, so the amount keeps growing. And, once they have a judgment, they can put a lien on your bank account. Surprise! One day, your bank account is empty and you also owe the bank a "lien fee" of around $150. They can also garnish your wages.
Not completely true, not wrong either, because it is state specific and the OP didn't give a state, some information is in the link above. Know that Nolo's statute of limitations page (the one on the linked page) is just in regards to when a creditor (landlord in this case) can take you to court and not the SoL on the judgment itself, there is a seperate page on their site for that I think but if not just google it. Judgment renewals are state specific and the credit report is renewed when a judgment is renewed. Here in AZ I have to renew a judgment every 5 years and as such a new entry on your credit report will pop up and exist for another 7 years every time that judgment gets renewed.
Most of your information is actually good. I agree with you that if someone needs to file bankruptcy then that is what they need to do and why the option exists in the first place. Like I said filing now might actually improve your options because you can't file again anytime soon.
Side note: I really don't like how Nolo has their information laid out, not to mention they are flat out wrong on some things. It becomes misleading so if you use a site like Nolo make sure you take at look at the actual law they reference or find another place that has the information too. This isn't a Nolo specific issue as I have found problems on Landlordology too with their AZ stuff.
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