Can I get an apartment if I have filed bankruptcy?
Some landlords (mostly large, corporate-owned) have a "strict" formula they use to determine whether to rent to someone. Bankruptcy counts as a negative, as would any other poor payment history. With some of these apartment complexes, it might be difficult. Of course, you could offer additional security as a deposit and that sometimes forces them to "recalculate."
Individually owned, or smaller apartment buildings are generally not as strict and if the landlord takes a liking to you, the landlord can find a way to get the lease done. Again, offering a bit more security deposit would go a long way toward convincing the landlord you aren't going to skip out on rent.
In my years of representing debtors in consumer bankruptcy cases, I've actually had a number of clients who were told by landlords to file bankruptcy first, then they would be willing to rent to them. Thus, some landlords are savvy enough to realize that renting to someone who is facing wage garnishment or a lawsuit by a creditor that isn't getting paid is much more risky than renting to the same person who is debt-free!
I believe that a landlord who turns you down citing the bankruptcy would have turned you down even without the bankruptcy because of your debt problems. Bankruptcy tends to be a solution, not the problem. Thus, your real question is "will I be approved for an apartment if I have trouble paying my bills and will bankruptcy make my chances better or worse?"
Taking the question this way, the answer is, in my opinion, that bankruptcy makes your chances better. Landlords often turn prospects down because of their poor payment history and poor debt to income ratio. But, bankruptcy is a way to eliminate the debt so that you can begin rebuilding and so you can use your available cash to pay necessities like rent, utilities or groceries. It's a way to demonstrate to the landlord that you are a good risk because the landlord is your priority and there is no one else who has a claim to your income that would prevent you from paying your rent.
Individually owned, or smaller apartment buildings are generally not as strict and if the landlord takes a liking to you, the landlord can find a way to get the lease done. Again, offering a bit more security deposit would go a long way toward convincing the landlord you aren't going to skip out on rent.
In my years of representing debtors in consumer bankruptcy cases, I've actually had a number of clients who were told by landlords to file bankruptcy first, then they would be willing to rent to them. Thus, some landlords are savvy enough to realize that renting to someone who is facing wage garnishment or a lawsuit by a creditor that isn't getting paid is much more risky than renting to the same person who is debt-free!
I believe that a landlord who turns you down citing the bankruptcy would have turned you down even without the bankruptcy because of your debt problems. Bankruptcy tends to be a solution, not the problem. Thus, your real question is "will I be approved for an apartment if I have trouble paying my bills and will bankruptcy make my chances better or worse?"
Taking the question this way, the answer is, in my opinion, that bankruptcy makes your chances better. Landlords often turn prospects down because of their poor payment history and poor debt to income ratio. But, bankruptcy is a way to eliminate the debt so that you can begin rebuilding and so you can use your available cash to pay necessities like rent, utilities or groceries. It's a way to demonstrate to the landlord that you are a good risk because the landlord is your priority and there is no one else who has a claim to your income that would prevent you from paying your rent.
What exactly is the difference between debt settlement and bankruptcy?
The simple answer is that debt settlement is an out-of-court voluntary arrangement between a debtor and creditors. Bankruptcy is a legal proceeding in federal court that can result in an order by a judge discharging liability.
A successful bankruptcy filing results in a court order giving the debtor a "discharge" of debt. Court orders can be enforced against creditors. Generally, there are two types of bankruptcies for consumers, Chapter 7 and Chapter 13. Chapter 7 eliminates debt. Chapter 13 restructures debt into a repayment plan based on what the debtor can afford to pay, not necessarily on what is owed to the creditors. Bankruptcy laws are powerful because they protect the debtor from collection proceedings even when a creditor isn't interested in making a deal.
A debt settlement is an out-of-court voluntary negotiation process between the debtor and creditors. A debt settlement company, generally, is an agent for the debtor that works out some sort of settlement or repayment plan that is acceptable to one or all of the debtor's creditors. Debt settlements do not offer the same protections and level of relief as a bankruptcy. There is no court order that can be enforced. There might be a contract that could be enforced, but not always and the contract usually is full of ways for a creditor to back out of the deal. For a debt settlement to work, creditors must agree to accept the settlement or proposed payment terms.
A debt settlement is reported to a credit bureau, as is bankruptcy. Bankruptcy, however, can remain on the report for up to 10 years, whereas debt negotiations or settlements are only reported for 7 years. However, both options adversely impact credit scores. In fact, if you are in the unfortunate position of having to consider one of these options, your credit score is probably on its way down anyway.
For more information about these options, you can visit my website at www.legalhelpers.com.
A successful bankruptcy filing results in a court order giving the debtor a "discharge" of debt. Court orders can be enforced against creditors. Generally, there are two types of bankruptcies for consumers, Chapter 7 and Chapter 13. Chapter 7 eliminates debt. Chapter 13 restructures debt into a repayment plan based on what the debtor can afford to pay, not necessarily on what is owed to the creditors. Bankruptcy laws are powerful because they protect the debtor from collection proceedings even when a creditor isn't interested in making a deal.
A debt settlement is an out-of-court voluntary negotiation process between the debtor and creditors. A debt settlement company, generally, is an agent for the debtor that works out some sort of settlement or repayment plan that is acceptable to one or all of the debtor's creditors. Debt settlements do not offer the same protections and level of relief as a bankruptcy. There is no court order that can be enforced. There might be a contract that could be enforced, but not always and the contract usually is full of ways for a creditor to back out of the deal. For a debt settlement to work, creditors must agree to accept the settlement or proposed payment terms.
A debt settlement is reported to a credit bureau, as is bankruptcy. Bankruptcy, however, can remain on the report for up to 10 years, whereas debt negotiations or settlements are only reported for 7 years. However, both options adversely impact credit scores. In fact, if you are in the unfortunate position of having to consider one of these options, your credit score is probably on its way down anyway.
For more information about these options, you can visit my website at www.legalhelpers.com.
But What if I Can’t Afford an Attorney?
I often hear this from potential clients. Many feel they can't afford to hire competent counsel to represent them. My view is that you can't afford NOT to hire an attorney to help you with bankruptcy. Also, it's less expensive than you might think to afford an attorney.
Most of you have heard about bankruptcy reform and the change in the law. Unfortunately, there are some additional requirements regarding paperwork and documentation, you have to seek credit counseling prior to filing, and you have to complete a debtor education course before you can get a discharge. However, this shouldn't discourage you from seeking competent counsel. An attorney is there to help you through these requirements. Because of all this stuff, it's more important than ever to hire an attorney to represent you.
I've heard reports from various trustees across the country indicating that the failure rate for "pro se" cases (cases where debtors are representing themselves) is extremely high! Given that it is now harder, after the changes in the law, to "re-file" multiple cases, it's very important the case get done properly the first time.
As far as affording the case, just think about how much you've been paying on your credit cards (or should be paying). If you've been sending minimum payments to your credit card companies on a debt load of $15,000, you're likely spending in excess of $350-400 per month just to cover minimum payments. You could cover the cost of your entire bankruptcy including attorney fees, credit counseling fees and court costs in less than 4-5 months of payments! Imagine, if you only had to make 4 or 5 more minimum payments on your cards and you'd be debt free! That's an exciting prospect.
I think it's also important to understand how much is at stake should you decide not to file at all, or if you file "pro se" and the case doesn't work, how much that would cost you. Creditors can garnish your wages, put liens on your house, freeze your bank accounts, and cause you to miss work to appear at post-judgment hearings.
Once you consider these factors and compare bankruptcy fees to fees for other legal work, to pay even $2,000 for bankruptcy relief is a relative bargain! Also consider that most bankruptcy attorneys offer no interest payment plans so you don't have to pay a chunk of money all at once. It is true that you will only get limited relief until the attorney fees are paid in full, but that's better than giving up the hope of getting out of debt.
I understand that there still may be people out there who can't even afford $1,000 for a legal fee. Depending on the case, sometimes bankruptcy fees might be less than that.
For those very few who truly can't afford an attorney for bankruptcy, there are legal clinics sponsored by law schools, or volunteer legal service agencies that may be available to help you. Some court clerk's offices provide a "help desk" for people and it's possible the "help desk" could be a resource for you as well.
In sum, it's unlikely that you can't afford legal help in bankruptcy. Bankruptcy fees are very affordable in relation to other legal work and most importantly in relation to what you would pay if you didn't file for bankruptcy. If you are one of the few who truly can't afford bankruptcy, you should seek help at a legal clinic at your nearest law school, with a volunteer legal service agency, or with your local bankruptcy court clerk's office. Don't assume you can't afford to file for bankruptcy, though. Most attorneys will adjust your fees based on your situation and offer no interest payment plans.
