My husband and I just fixed up our first property to use as a rental and now have it on the market. We are getting calls from all kinds of people from the Craiglist ad (surprise, surprise). I've got a Rental Application and was describing the info I'd need to this guy on the phone. He sounds like he would not make a good tenant (he's banking on getting a job in the area but doesn't have it yet) but he brought up an issue we hadn't considered: outstanding medical debt. He says he owes in the neighborhood of $140,000 and decided to "feed his family" instead of paying it. Will the hospital eventually garnish his wages to get paid? Do any of you have experience with this issue? This guy most likely won't rent from us, but we need to know how to handle it.
I can tell you from the viewpoint of having thousands of medical debt myself. I am now on disability for a back injury (Ruptured and herniated discs). When I incurred the debt originally I did not have insurance so I was left with a sizable debt. The creditors eventually were able to file with small claims and would have eventually garnished my wages. I did however make arrangements to pay each one of them a little each month which I have been doing for over a couple of years now. I would have to say that unless this person has made some indication to you that he has been making payments then I would steer clear. Just my two cents worth, but I feel everyone deserves a second chance. With that said, I feel strongly in saying that does NOT mean you and your husband should take a chance with your money (investments). In the end, trust your instincts and go with what your intuition is telling you! I think you are pretty smart in reaching out on this forum and I wish you all the best. Feel free to email me if you need more specifics on this situation. I would be glad to help you!
If someone is unemployed now but thinks they "will" get a job, that's not a very good prospect.
@Stephen Barton Thank you for sharing your personal situation so we can understand better what it means for someone to have that kind of debt. He didn't indicate he was making payments, but I would definitely find out more were we to rent to him. @Dawn A. you're right! He is working now in another state and is waiting on a call from a local employer, hence his interest in my house. Based on what he's told me, he's too much of a risk. If he comes to view the property we'll talk more in-depth. Thank you guys!
Huge medical bills aren't as big of a deal to me because I know how ridiculous medical costs can be but if they have small unpaid medical bills then I see that as a problem. But you're right that he doesn't sound like he's ready to rent from you.
Originally posted by @Janice Harvison:
He is working now in another state and is waiting on a call from a local employer, hence his interest in my house.
That's somewhat different. I thought his intent was to move first then look for a job. If he's almost got one then that may change things a little bit. If he does get the offer you can call the employer and verify that they did indeed offer him a job.
I was "banking" on buying 4 properties this year. Ended up only buying 1. Just sayin'. :)
I would be concerned about the job thing.... but I try to not consider medical bills in my tenant screening. If they have $140k of medical bills and not a single late payment in 3 years with a good job, I will take them. I had a work injury 10+ years ago and fought workman's comp for 3+ years before they started paying any of my bills. It was a huge pain and I refused to pay them until my claim was processed.
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