Protect yourself from Ch.7 renters.

Hi Group. I have a real clean cut question to ask.

I am currently going thru my applicants, and one that I really like
had just filed Ch.7. She was going to let her house foreclosed due
to an extensive repair that was unforeseen (did not pick up by home
inspection) and out of her control.

So, in the process of me short selling her property with her bank. She
is interested in renting one of my unit.

I already know that her credit is shocked. And she is under Ch.7
protection. Does that mean she can not file another Ch.7 in the near
future? And she will be OK to rent to?


Does it means she has a history of not paying, and I should avoid at
all cost.

She sounded real nice and actually wanted to purchase my rental using
lease option. What should I do to protect myself?

Thanks in advance.

Anthony (Realstart LLC)

My understanding is you can’t file back to back bankruptcy at least not for another 7 or 10 years (not sure). Filing for Bankruptcy is supposed to give people a second chance.

She did not get into bankruptcy from a missed item by an inspector. So she must have a history of non-payments, late payments, in general spending beyond her means.

Although this is what it probably means, doesn’t mean this was intentional on her part. She could have had a health problem or some other personal disaster that led her down that path , kept her out of work or whatever.

If this is the case, maybe she might be a worthy tenant if she is back on her feet, however, she could just plain be irresponsible. You need to find what her story is or just find someone better.


Thanks, that make some sense.

She filed for Ch.7 inorder to hold on to her property I guess.

Her property needs work. (a new roof) and she is not in the position to pay for the repair as well as the mortgage. So she stopped paying for the mortgage. which resulted in Foreclosure.

And ultimately filed Ch.7 in trying to save the house.


still doesn’t make sense to me…there’s got to be more going on than that.

run a credit check on her to find the real story

need to get her permission in writing to do so.


You file Ch 13 to stop a foreclosure. Ch7 means you have insufficent assets to cover your debts. This happens for more than one situation/debt. A person in Ch7 is not in a position to talk about purchase options (unless you give the options for next nothing).

Depending your state’s eviction laws, I would exercise extreme caution in renting to someone in Ch 7. If you need to rent them to get the short sale done, thena consider it part of the transaction cost as it is highly likely they will be delinquent within a few month.

Unfortunately, I have dealt with a few folks like this and they always have neat and clean answers foir their “bad luck”, but their pattern of behavior is always the same (non-payment of commitments)