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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17223
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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A potential tenant has two bankruptcies on their credit (scores

This answer was rated:

A potential tenant has two bankruptcies on their credit (scores are 500/523). Both Chapter 13, one in 2011 and one in 2013. They provided references (personal/banking/work), both make a great income (one provided current pay stubs making $110K/yr, the other is self employed and claims to make $340K/yr in the restaurant business), they offered to pay 2-3 months sec dep and are looking for a 2-year lease on our condo that is renting for $2,700/mo.

I'm a new landlord and this scares me to be very honest. I liked them and want to give them a chance, but I don't want to be pulled into a mess. How can I protect myself? Should I deny them or are there things they can do or provide to make this less of a risk for the landlord?

WALLSTREETESQ :

This is a valid concern,

WALLSTREETESQ :

a chapter 13 is a payment plan bankruptcy, what may have happened is that they filed it to stop or prolong a foreclosure, you may want to ask them about the facts of the bankruptcy,

WALLSTREETESQ :

what you may want to do is have them provide another guarantor for the lease,

WALLSTREETESQ :

this way you can have another party to sue,

WALLSTREETESQ :

also be aware the chapter 13 cases if dismissed, may have been filed to stop a foreclosure, and is not the same as a chapter 7 bankruptcy,

WALLSTREETESQ :

which is when the debtors discharge all there debts,

WALLSTREETESQ :

a chapter 13 is an agreement to pay creditors over a period of time,

WALLSTREETESQ :

You should also consider asking for bank statements, tax returns and

WALLSTREETESQ :

6 months paystubs,

WALLSTREETESQ :

Also, consider asking for an accountants letter showing the income

WALLSTREETESQ :

for the business of the self employed

WALLSTREETESQ :

tenant

Customer:

Thank you

WALLSTREETESQ :

Good luck, if you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

I would also consider calling the employers to see how long they were employed,

WALLSTREETESQ :

if they have been employed for one year or longer with that salary,

WALLSTREETESQ :

you can have faith they will be continued to be employed, and you can garnish wages if they fail to pay rent

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

Customer:

They are moving to the area becuase his wife is relocating for her new job...she started there just recently (provided 1 paystub)...not sure there a lot of history there...

Customer:

thanks.

WALLSTREETESQ :

then contact her previous employer,

WALLSTREETESQ :

and ask about employment history and salary,

Customer:

Yup, looks like this is going to require a lot of digging. Will do.

WALLSTREETESQ :

you should ask them to provide two year tax returns that will show you a good history,

Customer:

Other than income verification/history...is there anything I can request to avoid getting pulled into a bankruptcy (since their track record isn't great)? I just envision signing a lease, they stop payments and the lease payments they miss end up getting paid cents on the dollar in court...

WALLSTREETESQ :

another guarantor is best

WALLSTREETESQ :

that is the best protection

Customer:

Thanks. I will look into that and make a request.

WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you
good luck