In most of the US, yes. A private landlord may deny a rental applicant because of a bankruptcy if the written screening criteria say so and every applicant is held to them. Screening reports can show a bankruptcy for up to 10 years, Colorado limits what you consider to seven, and approving with a bigger deposit still needs a notice. This is information, not legal advice.
Is it legal to deny a rental applicant for bankruptcy?
Usually. Bankruptcy is not a protected class under the federal Fair Housing Act. The Bankruptcy Code does protect debtors from discrimination, but 11 U.S.C. 525 names governmental units, private employers and student lenders. Private landlords are not on that list.
The risk sits in how the rule is applied. A bankruptcy rule written down and used for everyone is defensible. One waived for some applicants and enforced for others is how a credit rule turns into a fair housing complaint.
How long does a bankruptcy show on a screening report?
Up to 10 years. Under 15 U.S.C. 1681c, a consumer report may not include a bankruptcy case more than 10 years after the order for relief. Collection accounts and most other adverse items drop off after seven. So a screening report can still show a bankruptcy three years after the debts it cleared have disappeared from the same file.
That gap matters for your criteria. A rule that says "no bankruptcy" reaches further back than a rule that says "no collections". Decide which one you mean, and write the lookback into the rule.
Which states limit it?
Colorado is the clearest. Under C.R.S. 38-12-904, a landlord who uses credit history may not consider anything older than seven years before the application. For an applicant renting with a housing subsidy, you may not consider an adverse credit event at all unless federal law requires it.
California caps the workaround. Most landlords may not take a security deposit above one month's rent under Civil Code 1950.5. Since April 1, 2025, a higher deposit charged to a service member because of credit history needs a written statement, and the extra must be returned after six months without arrears.
Is a bigger deposit instead of a denial still an adverse action?
Yes. The FTC's guidance for landlords uses this exact case: an applicant has a bankruptcy on their report, and instead of denying, the landlord doubles the deposit. That is an adverse action, and the applicant must get a notice naming the screening company, saying it did not make the decision, and explaining the right to a free report and to dispute it. Our guide to the three parts an FCRA denial notice needs covers the format. The same applies if you require a co-signer instead, which our post on when you can require a guarantor covers.
What about Canada?
Canadian credit reports can include bankruptcy, and the Financial Consumer Agency of Canada lists landlords among those who may request a report to decide on renting housing. In Ontario, the Human Rights Commission says credit checks may be requested, but income must be considered together with rental and credit history, so a bankruptcy should be one input in the file, not an automatic no.
Where does this go wrong in practice?
On the first call. A prospect asks "I had a bankruptcy four years ago, is that a problem?" and the answer depends on who picks up. Write the rule once, per market, with its lookback and any alternative you accept, and give everyone the same answer. LetHub is AI leasing software for property managers: it answers rental inquiries by text, chat, email and phone in about 30 seconds, day and night, qualifies renters, books tours and runs ID-verified self-showings, using the answers you set for each unit. For the eviction side of the same report, see how far back you can check eviction history. Book a demo to see it on your listings.
Bankruptcy and rental applications: FAQ
Can I deny an applicant whose bankruptcy was discharged?
In most US states, yes, if your written criteria cover it and you apply them to everyone. Colorado bars considering credit history older than seven years, and a federal adverse action notice applies whenever the report played a part.
How long does a bankruptcy stay on a tenant screening report?
Up to 10 years from the order for relief under the Fair Credit Reporting Act. Most other adverse credit items drop off after seven years.
Can I charge a higher deposit because of a bankruptcy?
Only within your state's deposit cap, and it is an adverse action that needs a notice. In California, most landlords are capped at one month's rent, with extra rules for service members.
Does a voucher holder's bankruptcy count in Colorado?
No, unless federal law requires it. C.R.S. 38-12-904 bars considering an adverse credit event for an applicant renting with a housing subsidy.
