Need guidance - Should I rent to some1 w a discharged bankruptcy?

7 Replies

Originally posted by @Vidit Maini :

Folks,

What are your thoughts on renting to someone who has a discharged bankruptcy in 2014 ? What other factors/items can I check to reduce risk in such a case ?

Thanks a ton,

Vidit

 When they has a discharged bankruptcy they are a safer bet. They have gotten rid of all their debt and can't file again for many years. If they have income, it sholdn't be a problem.

I disagree. Bankruptcy demonstrates financial immaturity and risk. Just because they can't file bankruptcy for a long time doesn't mean they are going to pay all their bills and live responsibly.

I will accept a discharged bankruptcy after they've show two years of responsibility AND if they pay a significantly higher deposit. If it's within the past two years, I won't touch it.

Do a standard screening weighing heavily on there credit report. If they have not yet rebuilt their credit or it is not spotless regarding having zero late payments you reject their application the same as you would any applicant.

This is not a business where we reach out and give second chances. Concentrate on those applicants that are most deserving. We are not social workers or a welfare office we are only in business to make money. Cross the line is poor business management.

Always remember "no good deed goes unpunished".

Originally posted by @Nathan G. :

I disagree. Bankruptcy demonstrates financial immaturity and risk. Just because they can't file bankruptcy for a long time doesn't mean they are going to pay all their bills and live responsibly.

I will accept a discharged bankruptcy after they've show two years of responsibility AND if they pay a significantly higher deposit. If it's within the past two years, I won't touch it.

 Just curious, not challenging your statement but how does bankruptcy "demonstrates financial immaturity and risk" since:

Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year—making health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card bills or unpaid mortgages, according to new data. And even having health insurance doesn't buffer consumers against financial hardship."

https://www.cnbc.com/id/100840148

Originally posted by Account Closed:

 Just curious, not challenging your statement but how does bankruptcy "demonstrates financial immaturity and risk" since:

Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year—making health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card bills or unpaid mortgages, according to new data. And even having health insurance doesn't buffer consumers against financial hardship."

https://www.cnbc.com/id/100840148

There are around 700,000 bankruptcies a year so I don't know what you mean by two million. Around 60% of bankruptcies are medical.

Here's the deal. Some things happen that are beyond anyone's control. A middle-aged man can make sound financial decisions, live a financially responsible life, and get hit with a catastrophe that crushes him.

I just don't believe that the majority of bankruptcies fall into that category. I think the majority are people living on the edge, spending more than they should, spending their money carelessly and refusing to prepare for the calamities of life. When catastrophe hits, they naturally can't keep up. Those that spend their life preparing are far less likely to succumb.

I live in Grizzly bear country. We all know Grizzly are out this time of year, looking to fatten up before hibernation. Though attacks are generally rare, we are all told to prepare before traipsing around the mountains. Preparation includes how to avoid bears, how to respond when you see one, and how to defend yourself if they attack (bear spray, a Sig Sauer P220 in .45 caliber, a hatchet, or a sharp knife). Some people figure it will never happen to them so they do nothing to prepare. The level of preparation doesn't determine the likelihood of an attack but it does determine the likelihood of survival. Surviving a medical crisis is a lot like that.

Read here for one of the best Grizzly survival stories. Ron was a couple years behind me in my home town of Gates, Oregon.

The cause of a bankruptcy is irrelevant, medical or otherwise, what is important is the length of time since the bankruptcy and there record since.

Simply because it was caused by medical does not change the fact that following a bankruptcy a individual is financially fragile and a very high risk. Screen them all the same regardless of the cause.

Originally posted by @Nathan G. :
Originally posted by @Mike M.:

 Just curious, not challenging your statement but how does bankruptcy "demonstrates financial immaturity and risk" since:

Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year—making health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card bills or unpaid mortgages, according to new data. And even having health insurance doesn't buffer consumers against financial hardship."

https://www.cnbc.com/id/100840148

There are around 700,000 bankruptcies a year so I don't know what you mean by two million. Around 60% of bankruptcies are medical.

Here's the deal. Some things happen that are beyond anyone's control. A middle-aged man can make sound financial decisions, live a financially responsible life, and get hit with a catastrophe that crushes him.

I just don't believe that the majority of bankruptcies fall into that category. I think the majority are people living on the edge, spending more than they should, spending their money carelessly and refusing to prepare for the calamities of life. When catastrophe hits, they naturally can't keep up. Those that spend their life preparing are far less likely to succumb.

I live in Grizzly bear country. We all know Grizzly are out this time of year, looking to fatten up before hibernation. Though attacks are generally rare, we are all told to prepare before traipsing around the mountains. Preparation includes how to avoid bears, how to respond when you see one, and how to defend yourself if they attack (bear spray, a Sig Sauer P220 in .45 caliber, a hatchet, or a sharp knife). Some people figure it will never happen to them so they do nothing to prepare. The level of preparation doesn't determine the likelihood of an attack but it does determine the likelihood of survival. Surviving a medical crisis is a lot like that.

Read here for one of the best Grizzly survival stories. Ron was a couple years behind me in my home town of Gates, Oregon.

 I think the article means that *including family members*, that is the number affected by bankruptcy. The head of the family may have several dependents. I agree with your assessment that people do not prepare for emergencies and buy more *stuff* than they can afford. I would go one step further and point out that the food they eat leads to most of their medical problems. Something as simple as Tumeric (a root spice) or also called Curcumin sells for pennies, is readily available, is used in curries and other dishes and cures some of the medial problems people have. Yet, people choose to take prescriptions that cost hundreds of dollars a month to alleviate the condition rather than cure it. Obscure point? Not so much. Just practical. It's an entire lifestyle and most people aren't even willing to do something that simple. Being logical, one shouldn't rent to obese people because they are most likely to have medical problems and file for bankruptcy. But then who would be left to rent to?