renting with awful credit. red state edition.
July 8, 2018 5:42 AM   Subscribe

previous questions have helped with some insight, but i have some special snowflake details.

the difficulty is that i had to stop working last year due to a serious illness when i had considerable debt. and then that july i was hospitalized. i have been in medical facilities ever since until fairly recently. there were two months left on my lease, the electric didn't get shut off until months later, and credit debt is all in collections and a judgement.

i am on ssdi and that amount will cover (barely) the type of housing i would like to have. there is enough money for deposits and to sweeten the upfront amount if needed. i was self-employed, but not ready/able to work. i may never be ready, so paying off anything is not realistic right now. i have (not yet) filed bankruptcy.

i have an appointment to see a place from an individual (not a property company). how should i go about explaining this?
posted by lescour to Work & Money (12 answers total)
I’m afraid I don’t see any way for you to explain this that doesn’t make you sound like an instant “no”. If you have no means of earning an income, a lot of outstanding debt in collections, an SSDI benefit that will only just cover the rent, and a bankruptcy almost certainly in your future, that makes you such a tremendous financial risk that I honestly don’t see any landlord accepting it.

Maybe if you knew this person, or any landlord, personally and well enough that they would be willing to rent space to you for a nominal fee. Otherwise, your financial situation is so precarious that I would suggest considering renting a room in a shared house first. Filing bankruptcy itself is quite expensive, and if you choose not to do that (food and clothing are more important than credit card bills, it’s understandable) then that debt will continue to follow you around for the next several years. There’s also the matter of unexpected expenses that would come up—or even expected expenses. If almost all your projected income for the foreseeable future would go to cover rent, then how would you afford food, cleaning supplies, internet access?

This does not sound like a sustainable situation and again, I can’t see any landlord agreeing to it.
posted by Autumnheart at 6:12 AM on July 8, 2018 [1 favorite]

just a quick clarification. my ssdi is enough income to just reach the one third rule for rent percentage, not the entire amount, as is not subject to taxes. my budget can handle all expenses with a little extra to put back for emergencies.
posted by lescour at 6:23 AM on July 8, 2018

You will still need a plan for funding your bankruptcy and paying your judgment. Those things are not going to go away, and even though your SSDI income is exempt from garnishment, any savings you accrue would not be exempt.
posted by Autumnheart at 6:48 AM on July 8, 2018

Not to abuse the edit window, but I mention those things not to suggest you need to explain your financial plan, but because a landlord will also ask those questions. Even if they don’t actually ask you, they will certainly consider those factors in your application.
posted by Autumnheart at 6:49 AM on July 8, 2018

There are some apartment complexes that specifically, purposely rent some or all of their units to low-income people with disabilities. I have family members with disabilities who have rented from places like that. Usually you need to fill out an application to prove your status, but since you already get SSDI I hope it would be simple for you to qualify. Since I don't know where exactly you are I can't recommend any specific communities, but I would recommend contacting a disability advocacy group in your area and asking for recommendations.

You may also be eligible for state or federal housing assistance. Have you looked into your eligibility for Section 811?
posted by BlueJae at 6:56 AM on July 8, 2018 [1 favorite]

As far as your upcoming interview with a landlord goes, I would just be honest that a long term medical crisis caused you to fall behind on payments, and that negatively affected your credit, but now, your health has improved and you have a stable source of income, and you are sure you can cover the rent. You may get rejected. But you may also find that the landlord has empathy for your situation and wants to help you out. It's worth a shot. The worst that can happen is that the landlord will say no.

Since having a lot of credit checks on your record can negatively impact your score, you might want to be upfront about your situation with prospective landlords in your initial conversations BEFORE they run a credit check on you, so that you can hear right away whether they would be interested in renting to you or not, and avoid unnecessary credit checks from landlords who definitely would not be.
posted by BlueJae at 7:03 AM on July 8, 2018 [1 favorite]

I don't think things are as dire as other commenters. I would just be up front as mentioned earlier, otherwise present as easy as possible (hopefully you don't also have 3 dogs 2 ferrets and an indoor chicken), explain you are mature, responsible and have quiet habits (if true) and rent from a private landlord. Good luck!

You might also think about doubling your deposit if facing reluctance.
posted by arnicae at 8:41 AM on July 8, 2018

What happened at your last place? It's no big deal that you left before your lease was up, but did you let your landlord know what was happening and work with them to get your stuff out so that they could rent the place to someone else? I realize that this may not have been possible given what was going on with your health, but if you were able to and if your landlord could vouch that even during this hard time you were conscientious of paying rent and departing the premises responsibly, that could go a long way.

Also, I'd work on presenting this information in a confident way. With credit problems, you don't want to pretend they don't exist because that makes the landlord wonder "does this person think that these missed payments are normal?" But if your income is 3x rent, you can afford this place. You had a bad time, you fell behind on credit cards but handled your housing payments well, you're still resolving that debt but are confident you can pay this rent.

Also, it's illegal to discriminate on the basis of disability; hopefully you'll be dealing with people who know that. They can't treat you differently because your income is SSDI.
posted by slidell at 10:27 AM on July 8, 2018

i was basically unresponsive from july until september, and have no memory of this time. my brother handled getting my stuff out, and i thought had worked something out with the property company. i just found out their position is that i owe them for two months + a small amount the damage deposit didn't cover, and that they had been fired by the owner for letting this situation happen. so, not so great there. but they only had the lease for a year, and i am tying to contact the previous landlord to hopefully provide a counterbalance.
posted by lescour at 11:36 AM on July 8, 2018

Also, I hope you are aware that that judgment creditors CANNOT garnish your SSDI. If you have not already, you should write letters to your creditors informing them that your only income is SSDI. Google "judgment proof letter [your state]"

This is not, like, a magic incantation that makes your creditors go away or repairs your credit report, but it usually significantly deters collection activities. You may want to weigh the relative benefits and costs of bankruptcy versus stopping paying and ending up with multiple uncollectible judgments (which will fall off your credit report in seven years). It's a complicated question, especially if you think you may someday have earned income--just wanted to flag the issue for you.
posted by praemunire at 11:41 AM on July 8, 2018

I am a landlord in a red state and I would be happy to rent to you. I just ran an ad for my rental and I got so many bad applications, yours would look good in comparison. I had three different men apply who had three dogs each. Several single mom's who make less on minimum wage than you do on SS. (I plan on getting active in wage fairness because this is unacceptable.) I asked people on the app (which I don't charge for) what their credit score is. 95% said "I don't know". I'm serious. Even 2 people with high incomes.
I would probably want to know that you were paying a small amount each month to make your last rental right.
I would probably assume you were a good risk because you have boxed yourself in a corner where if you move into my place it would be very hard for you to move again. I see that as a plus as a landlord. Plus you can't get fired.
I would want to know you are not a hoarder and I will check your Facebook for ppl with Nazi tattoos.
*Other landlords may discriminate against you if you have anti-Trump posts.
posted by cda at 12:38 PM on July 8, 2018 [3 favorites]

gave a letter explaining my situation and a copy of my disability details along with my rental apps. i was able to get a suitable place. thanks everyone.
posted by lescour at 5:23 PM on August 18, 2018 [1 favorite]

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