Tenant prospect who filed bankruptcy - not yet discharged

[Rob K.]

I had a call today from someone who filed bankruptcy and is making payments on it. It won't be discharged until later this year. Based on our phone conversation, they had a bunch of past financial problems and their current rent is higher than mine.

After asking about the financials (haven't shown the house yet or verified anything) they take home 4.35 times the rent after taxes and payments on the bankruptcy. The income is very good and they allegedly have a great rental history.

If the income and rental history check out, could this bankruptcy affect me in a negative way?

[Bill Gulley]

After a BK has been filed, new contracts or financial obligations should not be entered into without them running it by thier attorney. Thier attorney should of and probably did give them that instruction as it can mess things up for them. Contracts made in contemplation of bankruptcy or made after filing may not be included and you should have a letter reaffirming the debt or obligation from the BK attorney. Credit wise, they are a better risk after BK than anyone else with financial issues as over the term of your lease they will be barred from filing that type of BK.

They may have a payment requirement in paying certain debts that could change thier disposable income, but the court will take into consideration thier living expenses including your lease amount, if that is done.

Get a letter from the BK attorney, the phone call is notice but go for notice and the reaffirmation in writing. :)