I have a tenant applicant who answered YES on my application form whether he/she has ever petitioned for bankruptcy. Year was 2012.
I have zero experience with this, a quick search on public records seems to suggest it was done to delay a foreclosure.
I haven't ran a credit check yet, will do it today. But wouldn't a bankruptcy put a significant strain on the credit scores or will it "reset" after a few years?
I probably will have a conversation with the applicant about it before I decide, I just need to educate myself on the subject so I know what I am talking about.
Yes, a bankruptcy will have a negative impact on their credit score, but they still might meet a minimum score. I wouldn't exclude a potential tenant due to a bankruptcy in their past.....as long as it is not an ongoing chapter 13.
Forgive my naiveté, but what about an ongoing Chapter 13 bankruptcy would incline you to exclude a potential tenant? I know next to nothing about filing for bankruptcy.
We have excellent tenants who had a bankruptcy in their recent past. I am not a lawyer-no legal advice given, but my understanding is to make sure the bankruptcy is closed. Otherwise your lease contract with them can get included in the bankruptcy...meaning they can get out of paying you rent.
After what I am currently going through, the best advice I have gotten is NEVER rent to anyone who has petitioned for bankruptcy in the past. They are more inclined to do it again, and it is a huge hassle to deal with.
This post has been removed.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.