Leasing to a formerly bankrupt tenant

[Armin Shivazad]

Hi all,

I am in the process of closing on a rental property and there is a tenant in place that wants to stay after the closing. He has been there for 4 years and is interested in renewing with me. I saw on the public court records that he owned a house but between 2009 and 2015 he has had issues paying his mortgage and credit card bills and finally in 2015 he was granted bankruptcy and his house was foreclosed. The previous landlord said he has paid his rent on time for the past 4 years.

My question from the group is would you avoid starting a lease with the tenant knowing he had bankruptcy and foreclosure in 2015? Also, would you screen the tenant again if the previous landlord has recommended him? 

Thanks a lot

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Originally posted by @Armin Shivazad:

Hi all,

I am in the process of closing on a rental property and there is a tenant in place that wants to stay after the closing. He has been there for 4 years and is interested in renewing with me. I saw on the public court records that he owned a house but between 2009 and 2015 he has had issues paying his mortgage and credit card bills and finally in 2015 he was granted bankruptcy and his house was foreclosed. The previous landlord said he has paid his rent on time for the past 4 years.

My question from the group is would you avoid starting a lease with the tenant knowing he had bankruptcy and foreclosure in 2015? Also, would you screen the tenant again if the previous landlord has recommended him? 

Thanks a lot

I'd screen to see if anything new popped up but a BK from 7 years ago is no big deal to me. A lot of people were really hurt by the crash of 2008 and tried for years to recover but finally realized they needed a fresh start. If he has been on time for 4 years, he has shown he has recovered and bravo for him.