Bankruptcy: What About Renting an Apartment or House?

Lady and Documents

Question: I am trying to rent an apartment, but I just filed bankruptcy. Filing bankruptcy was the best decision I think I’ve ever made because now I’m totally debt-free, but some landlords are telling me that I have to pay more or I can’t rent with them.

I filed because my business got too much debt and I personally guaranteed the debt. The loans and credit cards were backed by me. So when my business got into trouble, it pulled me down too. I admit that I spent a little too freely and bought stuff I didn’t really need, but I thought I’d be fine.

Now that I’m trying to rent, I feel like I’m being profiled or discriminated against just because I went bankrupt. They can’t discriminate me like that! Can I sue them for something?

K.B. in Woodstock, GA

Answer: As a local Georgia bankruptcy lawyer, we hear many people say filing for bankruptcy was a great decision and gave them a fresh financial start.

As for your exact question, it depends on the type of property you are trying to rent. In regards to government property, it is the law that they cannot discriminate due to the filing of bankruptcy. Government agencies cannot deny, suspend, or refuse to renew a license, permit, franchise, etc., simply because you have exercised your right to file bankruptcy. They cannot evict you from public housing for filing.

In regards to debt, generally, once the government- related debt has been discharged, all negative acts and sanctions against you must end. For example, if you lost your driver’s license for not paying a civil fine and then that fine is discharged in your bankruptcy, they cannot deny you a license.

However, not all government-related debts can or will be discharged in bankruptcy. If they are not discharged in your bankruptcy, all actions against you can continue after the bankruptcy. During the bankruptcy, however, they cannot take action due to the automatic stay provision of the bankruptcy statute.

Now, if the property you are trying to rent is privately owned, there are no laws prohibiting this type of discrimination. Private sector landowners can deny rental housing, a surety bond, or even withhold things like a transcript from a private college. If your potential landlord did a credit check and saw your bankruptcy, they can refuse to rent to you or ask for a higher monthly rent payment. They can also ask that you pay several months in advance. Therefore, in your case, with the information provided and because the property is privately owned, you would not have grounds to sue.

To avoid this discrimination, you could create a “renter’s resume” that shows you in the best light. People sometimes use old landlords as references. We’ve even seen letters written by landlords or even old roommates attesting to the fact that a renter always paid on-time. You can also work on your credit score by making on-time payments on your credit cards or loans. We’ve seen people get a cosigner for the lease or roommates with good credit. In short, there are many ways to get a nice place to live.

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