When you're drowning in debt and all other options have failed, bankruptcy may seem like the only way out. Although it may sound daunting, filing for bankruptcy can actually be a great way to regain financial stability. One common misconception is that people who file for Chapter 7 bankruptcy relief never recover financially. This is not true. While it is true that bankruptcy can have a negative impact on your credit score, it is not a permanent sentence. You can still qualify for credit cards and loans, and even own a new car or a home. In fact, getting out of debt can open doors that may not be open when you still have thousands of dollars of missed payments. So, how can you recover from bankruptcy and find an apartment after filing for Chapter 7? Let's take a closer look.
How To Rent An Apartment or House After Bankruptcy
Filing for Chapter 7 bankruptcy will cause the bankruptcy filing to appear on your credit report for a decade. Most landlords review credit reports before approving rental applications. However, landlords have varying opinions when it comes to bankruptcy filings.
For some landlords, renting to someone who has filed for Chapter 7 bankruptcy can be a cause for hesitation. But, for others, the bankruptcy case may indicate that you have cleared your debts, making it more likely for you to afford rent payments. As a result, finding a place to rent after filing for Chapter 7 bankruptcy may be more challenging, but it is still possible.
Ways to Improve Your Chances of Renting After Bankruptcy
Let's explore some ways you can increase your chances of renting a place after declaring bankruptcy.
By the way, keep in mind that renting an apartment may be easier than renting a house after filing for Chapter 7 bankruptcy.
- Be aware that some landlords may require a higher security deposit. Plan for this additional expense.
- Explain your situation. Many people file for Chapter 7 due to circumstances beyond their control. Write a letter to the landlord detailing what happened. The landlord may take into account factors that led to the bankruptcy.
- Highlight your employment history, positive rental history, and available income to convince the landlord to approve your rental application.
- Ensure that your recent credit history demonstrates responsible money management. You may not be able to erase past financial issues, but emphasize that you have not had any recent credit problems.
- Try to work with an individual landlord instead of a company. Companies may have strict policies that managers must follow. Individual landlords make decisions on a case-by-case basis, which is more favorable for you.
- Obtain written references from your employer and previous landlords to include with your rental application. Personal references may also be helpful, but professional references carry more weight.
You Can Thrive After Filing a Chapter 7 Bankruptcy Case
Deciding to file for Chapter 7 bankruptcy can be a daunting task. It involves weighing several options, but if you decide that it’s the best choice for you, remember that you can not only survive but also thrive after it.
Chapter 7 bankruptcy provides you with a fresh start. You can be debt-free in as little as six months after filing for bankruptcy relief. This fresh start allows you to focus on rebuilding your finances and creating a healthier financial future. With time and dedication, you can rebuild your credit and even rent a new apartment after Chapter 7.
However, it's essential to remain diligent with your finances even after filing for bankruptcy. Although you may have secured a new apartment, it's crucial to continue being money-smart. Let's explore a few ways you can manage your finances wisely in your new home.
Financial Wisdom While Renting After Bankruptcy
For years, financial experts have recommended spending only 30% of your monthly income on rent. This means that if you rent a home or apartment for $1,250 a month, you should be earning about $3,750 per month. But let's be real, that's not always feasible. Suggestions like these can be discouraging and unrealistic. The good news is that there are ways to save money while renting.
Whether you're renting by choice or because you're searching for homes for sale, here are eight money-saving tips to help you get started.
1. Consider a roommate.
Are you struggling to make ends meet every month? If you're single and looking to reduce your monthly expenses, getting a roommate can be a great solution. While it may not be feasible for couples with children, having a reliable roommate can help you share the burden of rent and utilities. If you don't know anyone in your area who's looking for a roommate, don't worry. There are websites like Roomster that can help you find potential roommates in your city.
By sharing the cost of living expenses, you can save a significant amount of money each month. Plus, having a roommate can also provide you with companionship and someone to share household chores with. However, it's important to choose your roommate carefully to ensure that you're compatible and have similar lifestyles and expectations.
2. Set your bills on autopay.
Let's face it: being an adult can be tough, especially when it comes to remembering all those pesky monthly bills. If you're tired of getting hit with late fees, setting up autopay is a great solution. This handy feature automatically deducts the amount due from your account, so you never have to worry about missing a payment.
Of course, there may be situations where autopay isn't an option. In that case, don't despair! You can still stay on top of your bills by setting a monthly reminder on your phone. This way, you'll get a notification when it's time to pay up, ensuring that you never miss a due date again.
3. Move to a different neighborhood.
Let's face it, we all want to live close to our workplace, friends, and other essential services. But the closer we get to the city center, the more expensive rent becomes. However, there's a simple solution to save some money - move a bit further out. Sure, your commute might increase by a few minutes, and you might have to drive instead of walk to your favorite restaurant. But, if it means you can save some cash on rent every month, it's worth considering.
Living further out from the city center can have its advantages. You may find a more spacious apartment or house with a yard, and you'll be able to enjoy a quieter neighborhood. Plus, you might discover new local gems that you wouldn't have found otherwise. However, keep in mind that you might need to adjust to a different lifestyle, and you might need to spend more time commuting.
Overall, it's all about finding the right balance. If you're willing to compromise a bit on location, you might be able to save some money and enjoy a more peaceful living environment. It's worth considering your priorities and weighing the pros and cons before making a decision.
4. Choose an apartment with fewer upgrades.
If you're unable to move to a different part of town, there's still an option to save money on rent. Consider downgrading to a more basic apartment. Many apartment complexes offer both upgraded and basic units. Although the upgraded units may have fancy features like granite countertops, stainless steel appliances, and updated flooring, they typically come with a higher monthly rent. On the other hand, basic units may have Formica countertops and black appliances, but they're more affordable, allowing you to save some cash.
5. Be a good steward over your utilities.
Are you interested in reducing your monthly expenses? Believe it or not, small actions such as turning off the water while brushing your teeth and switching off lights when leaving a room can make a significant difference. Although the savings may seem insignificant at first, over time, they can add up and make a considerable impact on your wallet. So, why not give it a try?
6. Share the internet with a neighbor.
Let's face it, we all want to save money wherever we can. And while it may seem a little sneaky, there's a way to cut down on internet costs that you might not have considered. Many apartment complexes offer free Wi-Fi as part of the monthly rent, but if your complex doesn't, there's still hope. You can split the cost of internet with a neighbor who's willing to share. If that's not an option, you can always create a hotspot from your phone. Sure, you won't be able to play Call of Duty for hours on end, but it'll get the job done for your basic connection needs.
7. Negotiate the price of your rental.
Many people assume that rental prices are fixed, but that's not always true. It's worth asking for a lower price, as you may be surprised by the outcome. Even if the landlord says no, you haven't lost anything. To increase your chances of success, try negotiating during the off-season or in a large complex. In a college town, for instance, you're unlikely to get a discount when school is in session. Instead, consider leasing during the summer when many students are away and there are more vacant units available.
8. Cook meals at home.
To be honest, I'm not a big fan of cooking, especially the clean-up part. However, I do love to eat. Eating out can be expensive, so making meals at home can save you a lot of money. One strategy is to plan a weekly menu and only buy the ingredients you need for those meals. This way, you won't end up wasting perishable items.
While Luther Vandross and Janet Jackson may have sung that "the best things in life are free," I think having a roof over my head is pretty important, and that's definitely not free. In today's world, everything seems to be so expensive, and it can be tough to catch a break. Many of us find that our paychecks are already spent before they even hit our accounts. But don't worry, there are ways to save money, and we've got some tips to help you get started on your path to a debt-free life.
Conclusion
It's essential to be mindful of your spending and cut costs intelligently, especially if you've recently emerged from debt or completed a Chapter 7 bankruptcy. Renting a place to live can be tricky in these situations, but you can avoid debt and maintain financial stability by being smart about your renting habits.