We're renting out our house soon and someone filing for bankruptcy inquired. I guess he is filing due to divorce but he said he could provide pay stubs and bank records to prove income and rental history.
Would you give him the opportunity or look elsewhere?
I would do a credit check (obviously) and see what exactly the situation is. I say this as someone who lost my house to foreclosure due to a divorce. But EVERYTHING else on my credit is immaculate. I've NEVER had a late payment on anything else, have a good history of credit, very stable employment, etc. So I guess I'm just saying it's worth checking into at the least.
We did, and he has been great so far. He lost his house in the divorce and bankruptcy due to medical bills and the divorce. But, its him, his new girl (baby mama), and baby mama's mama.
eta: when I called the previous landlord, she was really nice. One of the things she told me was "in my years of being a landlord, I've learned that most renters are renters for a reason, and the reason is usually bad credit. But most folks pay their housing expense first. And these folks have been great."
I probably would, after checking references with past landlords or similar and perhaps pulling a credit report. Sometimes bad things happen to good people. Now if he's filing for bankruptcy and he also has a long history of bailing on debts or late payments, that's another story. But then where do you live if you have really shitty credit? Will anyone rent to you?
I probably would, after checking references with past landlords or similar and perhaps pulling a credit report. Sometimes bad things happen to good people. Now if he's filing for bankruptcy and he also has a long history of bailing on debts or late payments, that's another story. But then where do you live if you have really shitty credit? Will anyone rent to you?
Almost half of the people who responded to this post would!
Post by MrsManners on May 17, 2012 21:14:26 GMT -5
I would pull credit history and call references. Then I'd go with my gut after I met him if all the other things validated his story. And I'd make sure I had a tight lease.
I probably would, after checking references with past landlords or similar and perhaps pulling a credit report. Sometimes bad things happen to good people. Now if he's filing for bankruptcy and he also has a long history of bailing on debts or late payments, that's another story. But then where do you live if you have really shitty credit? Will anyone rent to you?
Tough shit. That's what you get for not paying your bills.
(signed the bitter, unemployed girl who lost 100k and is still upside down on her house, but pays her mortgage anyway)
I probably would, after checking references with past landlords or similar and perhaps pulling a credit report. Sometimes bad things happen to good people. Now if he's filing for bankruptcy and he also has a long history of bailing on debts or late payments, that's another story. But then where do you live if you have really shitty credit? Will anyone rent to you?
Tough shit. That's what you get for not paying your bills.
(signed the bitter, unemployed girl who lost 100k and is still upside down on her house, but pays her mortgage anyway)
To the person 100k under water on your house...A person can be filing BK and never have owned a house. I don't see what filing BK has to do with being upside down on a house.
I would rent to him, however, I'd get 2 months rent up front plus deposit and make sure he knows that if he doesn't pay rent by X date, eviction starts.
I've read in a few places that actually a lot of times, people with bad credit are the best renters because if they don't pay rent, they are homeless. They know they don't have options. And people with good credit can bail just as easily.
Tough shit. That's what you get for not paying your bills.
(signed the bitter, unemployed girl who lost 100k and is still upside down on her house, but pays her mortgage anyway)
Wow.
Absolutely not.*
*That said, if the reason he/she filed bankruptcy was something like medical bills and the issue is resolved and they have steady employment and have a good history of paying bills, I'd consider it. Given how unlikely that scenario is. No.
Whether I'd consider it would also depend on how hard it would be to evict him for non-payment. I've heard some horror stories about how it can take almost a year in certain states because tenants get so many second chances. If that's the case in your state, I've be VERY picky.
We did, and he has been great so far. He lost his house in the divorce and bankruptcy due to medical bills and the divorce. But, its him, his new girl (baby mama), and baby mama's mama.
eta: when I called the previous landlord, she was really nice. One of the things she told me was "in my years of being a landlord, I've learned that most renters are renters for a reason, and the reason is usually bad credit. But most folks pay their housing expense first. And these folks have been great."
*That said, if the reason he/she filed bankruptcy was something like medical bills and the issue is resolved and they have steady employment and have a good history of paying bills, I'd consider it. Given how unlikely that scenario is. No.
That's actually a common situation with bankruptcy filers and not unlikely at all.
We've got about 10 people interested at this point, so we'll move forward with all... But honestly if all other aspects are comparable, I'll probably go with someone else. Mainly because this is our first time renting out and I don't need another thing to worry about!
I agree with everyone else. If you do a good search and see that his story is legitimate, and everything else is clean, I would give him a chance. I can not imagine being in those shoes and having to worry about bankruptcy and where I am going to live all caused by a divorce.
A little late here but, I have been a landlord for ~ 10 years now and in all honesty, because it is a very expensive process to evict a tenant I would not take the chance. I completely empathize with the person having been through a rough divorce but it's just not a risk I personally would be willing to take from a business/financial standpoint.
I know two friends, also landlords, who are dealing with over $10K in attorney fees after having to evict a tenant. One of them said "I was taken in by how charming he was" and he said he learned that it's a business transaction and not to get personally involved. He and his W have been living paycheck to paycheck, barely paying their own mortgage because of the legal mess. To boot, the property was grossly damaged so they now have serious work to have done before they can rent it again. Not trying to scare you but you just never know what could happen and I personally wouldn't take the risk even though I'd wish them well and hope that things work out for them.... just not at the risk of my own credit.
If being scared out of it is what it takes to save me money, time and frustration, scare away. I was hoping to get input from people who have rented out houses before for this exact reason!
Post by imojoebunny on May 18, 2012 7:30:39 GMT -5
No. And I say this as a good friend is going through this. I love them, but they are a financial train wreck. I don't want to take on the risk that they will end up in a mess again.
I'd do a background check and then decide. I'd say give him a chance because he at least came clean about it and let you know. That says a lot about his character.
Not everyone files bankruptcy because they racked up a huge CC bill and couldn't to pay it off. I know several people who have filed bankruptcy and none of it was due to not making their payments on time or having money issues that prevented them from paying their dues, etc. I'd just see what the cause was...maybe they let go of their home that was underwater or they closed a business that wasn't doing well or something.
Post by NachoProblem on May 18, 2012 7:56:43 GMT -5
Landlord here who rented to someone who filed bankruptcy. So far ::knocks on wood:: it has been a great experience. I'm not sure if he was a special case or what, but we couldn't have asked for a better tenant. His backstory was that he paid wayyy more for a house than it was worth in today's market (yeah, I know a lot of us are) and decided to walk away. During the time he owned his previous home they redistricted the public schools so his house that was previously part of an awesome school district, was now part of a district with failing schools. He didn't see a way out, so he walked away. Not that I agree with him... but that's his backstory.
We checked various references, and everyone said he was a great guy. We rented to him October 2009 and he's paid his rent on time or early every month. I'm hoping he never wants to leave! He's been a model tenant. I think part of it is that he knows he has to rebuild his credit and reputation if he ever wants to buy anything again, and he's doing the best he can in his situation to make that happen.
That being said, I think we were pretty lucky. When we were trying to rent the property, the rental market was saturated with properties like ours, and we were happy to find someone to pay the price we wanted. I think if we had multiple people interested, we probably would have rented to someone else. But who knows if someone with good credit would have been a better tenant?