Rental Lease Bankrupcy
I have a potential tenant, good references and seems honest. SOOOO honest infact that she has indicated she is having to file for bankrupcy next month due to some bad choices several month back... she had a business with another partner and got taken to the cleaners. (All of this checks out, by the way... so here is my question.)
Assuming we give this person the benefit of the doubt, are there any legal red flags that could create problems for me once she files for bankrupcy?? We are in Georgia. Any legal reason that she could stop paying rent.. or that it could create problems for us in collecting???
I don't know what level of bankrupcy she is looking at filing.
When you look at her credit report is the bad credit limited to her business or has it started to spill over into "personal" bills?
If you have good feelilngs about her and all her credit problems seem to be related to the failed business venture I'd go ahead and rent to her. You might want to get a few months rent in advance (or charge a larger sec. dep.). Once she files any deliquent rent will be hard to collect but the rent going forward is outside the bankruptcy.
It has crossed over to personnel items, she had trouble with her car payments as well. She lost the car and now she has a newer model used car that she paid cash for.
At one of my REI meetings, we had a bankruptcy lawyer speak. He said that he had never seen (this is central FL) a bankruptcy interfere with a lease agreement.
So from the point of the bankruptcy affecting your abilty to collect rent, I beleive there is nothing to worry about.
You tenent selection criteria is another matter.
Brenda