Does Bankruptcy Affect My Ability To Rent An Apartment?

Unfortunately, bankruptcy will often affect your ability to rent an apartment.  Just like other creditors, potential landlords are often more wary of renting to individuals who have recently filed for bankruptcy protection.  Thankfully, the resolution to this is usually very straightforward, if not often easy.  Many landlords will require you to provide them with basically three months’ rent in order to allow you to sign the lease.  They will want one month as a security deposit, the starting month in advance and the “last month”, which they will basically hold as an extra security deposit until the end of the lease term.  With that, you will be able to rent most apartments.  As you can imagine, bankruptcy does not lead to homelessness for the hundreds of thousands of individuals who file every year.  

There are a few notes worth making here.  Most states have laws in effect that require the landlord to place all deposits, both the security deposit and the “last month rent”, into a reserved interest-bearing account.  The interest earned on those funds belong to you, not the landlord.  At the end of the first year, many landlords will be willing to return the “last months’ rent” deposit if they are asked for it, assuming rents have been paid timely through the year, with the accumulated interest.  Many states, cities and municipalities also have programs in place specifically to assist those recovering from financial challenges with rental assistance, security deposit assistance and rent controls.  These are worth investigating if you need to rent an apartment after filing for bankruptcy.