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Bankruptcy in past by Helen (Illinois) on December 31, 2017 @21:46

Hi All! A woman w/2 teen children wants to rent my SFH as she and husband divorced are are selling their house to split the assets. They had a bankruptcy 10 years ago and says it was from a failed business. She earns $89K year and says she will be getting child support. Rent is $1800.00 mo. I heard that once people do a BK and leave their creditors holding the bag, they have no problem doing it again and maybe again. Is this a risk you guys would take? I am waiting for her filled out Application and fee to run it and verify info on the
Application. Thanks for any comments, I greatly appreciate your wisdom and experience!
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Re: Bankruptcy in past by Anonymous on December 31, 2017 @22:22 [ Reply ]
I would use 20% for rent expense out of annual income. It is $108K annual income for financial qualification.

Re: Bankruptcy in past by Anonymous on December 31, 2017 @23:14 [ Reply ]
What happens if her child support payment doesn't arrive or isn't paid on time? Can she afford the rent without it?
Re: Bankruptcy in past by Anonymous on January 1, 2018 @02:35 [ Reply ]
Texas LL here. While in general I agree with your assessment that they may do the same thing again, I had a good experience with a family that had a BK.

The BK was only about 2 years in their past, but they had paid everything 100% for those 2 years per their credit report. The husband made good money. I decided to take a chance, and I am glad I did. I put them on a MTM and required cashiers checks for some time. But soon they demonstrated excellent payment habits and I moved them to a 12 month lease. They ended the lease properly and bought a house. So not all BK tenants are bad.
Re: Bankruptcy in past by Lacey on January 2, 2018 @11:59 [ Reply ]
BK tenants are not all bad.
LPA member Bob here sharing some philosophy I learned in one of q&a sessions with John.

That said, keep in mind what a BK tenant had had to .... dodge bills, dodge creditors, become used to owing more money than they can pay...
possibly develop bad attitudes against creditors or obnoxious collection agencies, landlords.... eviction system.

Sorry, but that is just not an education that I want my tenants to have because when push comes to shove, I may be dealing with someone who may not value their credit as much as I want them to leaving me very little leverage if I ever have to threaten their credit.
Re: Bankruptcy in past by Anonymous on January 2, 2018 @20:57 [ Reply ]
I would evaluate the chance is large or not for BK tenant candidates become bankruptcy during T's tenancy.
Re: Bankruptcy in past by Helen (Illinois) on January 5, 2018 @13:31 [ Reply ]
Thank you so much dear members! I really appreciate your taking the time to provide feedback.

This particular situation is BK 10 years ago, so by law, she can file again after 7 years! Interestingly, she failed to fill out the Rental Application as the Q's asked must have hit a nerve and she realized she cannot get past the Tenant Screening Service as any perjury on her Application means she is auto-dismissed and she looses her Application Fee. Very likely her FICO is very low and a background check would turn up some unfavorable info.

Thank you again, you are all so wonderful and so helpful. I love the forum and love the forms from LPA. They are the best!

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