San Diego, CA · Member since 2016 · 6 posts · 2 votes
Hi everyone, I have a lead who seems perfect on paper besides the bankruptcy in January 2016. She makes three times the rent though but is the bankruptcy a deal breaker?
It's all circumstantial. I've had two different tenants who have had bankruptcy on their records and they both were ideal 0 issue tenants. Life happens to people sometimes, you need to talk to them about it and ask questions, don't rule them out solely because of the bankruptcy
January of 2016 bankruptcy. On paper she is a terrible choice for a tenant. You want a tenant that knows how to manage money and will not resort to bankruptcy to default on her debts.
You would only rent to someone with a serious blemish such as that if you are extremely desperate and willing to take a risk. She may walk owing rent or worse case she may turn out to be a professional tenant and bankrupt you as well.
BK is not necessarily a non-starter, but I would question that if she makes 3x rent why she could not pay her debts. And this BK is still fresh. Other than the BK what has been her rental history? If you are feeling iffy, then pass. Set rental criteria; no BK in the past x years.
Did she file in January, or was it dismissed in Jan? And was it a Chapter 7 or 13?
If it was a Chapter 7 that was dismissed in Jan, and she has verifiable income and a steady job and good landlord references, I'd probably take her.
The problem with a BK that has not been dismissed yet, is that you could end up added into it. Same with the Chapter 13. And with the Chapter 13, she'll have payments to make on her debts, which you'd have to consider as far as can she pay the rent. I'd say no to a Chapter 13.
The upside to someone who has recently had a Chapter 7 dismissed, is that they can't file BK on any debt they owe you for 7 years. I'd rather rent to this person than someone with current bad debt.