What if I Can’t Pay My Rent?

It's a question that's probably passed through all renters' heads at some point: “What if I can't pay my rent?” It's only natural to be concerned about this, but if it happens, don’t panic. 

There are strategies worth trying to stay in your rental and manage your expenses. They range from working things out with your landlord to seeking debt relief on your other bills in order to free up cash for the rent. Here’s our guide on how to assess the situation and respond accordingly.

Reasons for Not Being Able to Pay Rent

Here are some common financial setbacks that can make it difficult to pay ‌rent:

• Job loss

• Unforeseen expenses

• Unmanageable debt payments

• Unexpected move.

Regardless of why you can’t pay your rent, the process for resolving this issue remains the same.

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What Happens When You Don't Pay Rent

Not paying your rent as outlined in your lease agreement could result in late fees or eviction, though this isn't always the case. Many lenders offer a grace period, which gives you additional time to pay before you get late fees. Some may waive late fees altogether if you reach out and explain your situation. Check your lease agreement for details about how much late fees could be, and how soon after your payment due date your landlord can charge them.

Eviction is usually a method of last resort for landlords, because they have to go through a process of getting you out of the rental property, then finding a new tenant. They could lose income and spend money on the unit and on eviction costs. For the most part, they'd probably rather work with you and receive your payment a little late, late fee or no.

You typically only have to worry about eviction if you're several months behind on your rent and you haven't given the landlord reason to believe you'll catch up soon. 

Eviction laws vary by state, but generally a landlord gives you a “notice to quit.” If you can’t pay what you owe and you don't vacate the property, they may take you to court, where a judge says whether the landlord can force you to leave the rental property.

In an eviction hearing, you can present your side of the story, including any rent receipts and any lease violations you believe your landlord has committed. You can also appeal an eviction decision if you believe the first court's ruling was unfair. You might improve your odds of success if you have lots of documentation and get guidance from a qualified attorney. 

What to Do When You Can't Pay Your Rent

If you can’t pay your rent, these actions may help you remain in your rental for now. 

Review your lease

Read your lease terms carefully. Review when rent payments are due, whether there's a grace period, and when you’re subject to eviction. If there's any confusion about what you find, talk to your landlord for clarification.

Know your rights

Regardless of what your lease says, renters have certain legal rights. These rights vary from state to state, and there may even be laws specific to your town or city about when, why, and how a landlord may evict a tenant. Knowing what rights apply to you lets you figure out how much time you have to solve the problem. It also tells you what recourse you might have before the landlord can evict you. 

Arm yourself with the important facts before you approach your landlord. This helps you know if they are violating your rights. If so, you may need to file a legal complaint against the landlord.

Talk to your landlord

Communication with your landlord is key to minimizing your risk of eviction and late fees. If you're struggling to pay your rent, reach out to your landlord as quickly as possible, ideally before you've missed a payment, to see if you can work something out. 

It's smart to do this in writing so you have documentation to prove you've made a good faith effort to resolve the situation. Consider writing a letter that includes:

• Your name and the address of your rental property

• Statement that you don't think you can pay your rent for a certain period

• Reason for not being able to pay (job loss, unexpected expenses, etc.)

• Mention of your past good payment history, if applicable

• What you're asking for (extra time to pay, waiver of late fees, temporary rent reduction, etc.)

• What you're offering, if anything (partial payment, payment plan, etc.)

• Your contact information, if your landlord doesn't already have it

Keep a copy of this letter for yourself. You may need it later to prove that you informed your landlord of your situation, and that you made an effort to negotiate an arrangement.

You could also ask your landlord about rental assistance programs in your area (discussed in more detail below). They may be able to connect you with resources that other renters have used when they've had a hard time paying. This could help you avoid late fees or falling further behind on your debts.

It's important to follow through with the agreement you make with your landlord. If you promise to make a partial payment, do so. If you say you'll be able to pay your bill a week after your original payment due date, see that the landlord has the money in hand by then. Showing that you keep your word is key to fostering trust with your landlord if you ever encounter difficulty paying your rent again.

Legal Rights and Eviction Protection

Every state has tenant protections, though the exact details vary. The National Low Income Housing Coalition has a database of the protections available in your state.

Protections might include:

• Eviction moratoriums

• Allowing payment to stop an eviction

• Legal defense fund to help defendants who can’t afford a lawyer

• Landlord and tenant mediation

• Limitations on the causes a landlord can evict a tenant for

• Rent stabilization regulations

• Eviction expungement or sealing so it doesn't show up on your record

• Limits on the fees a landlord can charge.

It's good to familiarize yourself with these legal protections, so you know what resources are available, and so you can recognize if your landlord attempts to violate these laws.

Most renters who fall behind on their payments don't wind up in court over it unless they've consistently failed to make payments and haven't communicated with the landlord about their situation. You may be able to avoid court just by keeping your landlord in the loop and making every effort to pay as soon as you can, even if you miss your payment due date.

If you find yourself facing court over an eviction notice or a failure to pay rent, look into free legal aid resources. You stand a better chance of getting a favorable outcome if you have a lawyer who understands state and local regulations surrounding the case.

Finding a Financial Solution If You Can’t Pay Your Rent

The best way to handle an inability to pay your rent depends on why you're not able to pay, and how long you expect this to be an issue. Here are some solutions to try.

Evaluate your budget

Sometimes, it's possible to free up cash in your budget by tracking your purchases over the last few months and identifying areas of overspending. There are budgeting apps that can help with this if you don't want to maintain a spreadsheet on your own. 

Seek out new employment

Even if job loss isn’t why you can’t pay your rent, a new job could be the answer. If you can find a better-paying job, you may find it easier to keep up with your rent payments.

Try a side hustle

If your regular job doesn't provide enough income, you could add a side hustle. Choose something flexible that you can fit into your schedule, ideally with prompt payments so you're not waiting weeks to get the money you earn.

Sell unused items

If you only expect to have difficulty paying your rent for a month or two, you may be able to make up the difference by selling unused items like old clothing or tools. See how much other people charge for the same items to get a rough idea of pricing, then list your item on one or more online marketplaces or consider hosting a garage sale to make some quick cash.

Negotiate other bills

You may be able to negotiate other household bills to free up more cash for rent payments. Some great places to start are your cable, phone, and utility bills. You may also be able to negotiate a lower credit card interest rate if you're carrying credit card debt. 

Another option for unsecured debts is debt settlement. This may help you get some debts off your plate without paying the full amount you owe.

Use priority budgeting

Priority budgeting is when you earmark money for your most important items (like rent) first. After you've covered your essential bills, you can use any remaining money for less-important items.

Create an emergency fund

Any time you have extra money, put it into an emergency fund so you're prepared for unexpected costs. Ideally, you want three to six months of living expenses, but it's fine to start with whatever amount you can. Then, if you're struggling to pay rent one month, you can dip into these funds to make up the difference. Just replenish your emergency fund as soon as you can, so you're ready for the next emergency.

Protecting Your Credit During Rent Difficulties

Missing a single rent payment likely won't affect your credit score unless your lender reports your payments to the credit bureaus. Some people choose to have their rent payments reported through services like Experian Boost if they have a good payment history they believe will help their credit score. But this could come back to bite you if you fall behind on your payments.

Even if your rent is reported, you probably won't see a late payment on your credit report unless you're 30 or more days behind. The further behind you are and the more recent the late payment, the greater the effect it could have on your credit score.

If your landlord can’t collect payment for several months, your missed rent payments might show up as a collections account on your credit report. This could significantly lower your credit score. Late payments and collection accounts typically remain on your credit report for seven years, though their effect diminishes over time.

You might avoid those outcomes by keeping an open line of communication with your landlord. If they understand why you can't pay on time and when they can expect your money, they're less likely to report late payments or turn you over to a collection agency.

Getting evicted doesn't directly affect your credit score. But it does create a public record that future landlords could find. This could make it difficult to secure new housing in the future, which is why it's best to avoid this by reworking your budget or seeking out assistance programs to help you make ends meet.

Emergency Rental Assistance Resources

There are several types of government assistance to look into if you're struggling to pay your rent, including:

• 211 helpline: This helpline can connect you with social services, including rent assistance. If you're struggling with other bills, like food, utilities, or healthcare, you can find help with these here as well.

• HUD-approved housing counseling agencies: Department of Housing and Urban Development (HUD) counselors can help people figure out how to better fit rent into their budgets, or where to turn to for help. This is a free service.

• State and local emergency rental assistance programs: Check with your state, local, or tribal government to see if they have resources to help those who can’t pay rent due to unexpected difficulties.

• Unemployment benefits: If job loss is why you can’t pay your rent, unemployment benefits could help you cover some of your bills until you find another job.

• Section 8 housing: This is a voucher that can help you pay some or all of your rent for any housing that meets program requirements. In most places, there’s a long, multi-year waiting list for this program.

• Subsidized housing: In some cases, the government pays apartment owners to reduce the rent for tenants with low incomes.

• Religious and charitable organizations: Many religious and charitable organizations, including The Salvation Army, help people with rent payments as well as other essential items.

• Programs that reduce other essential costs: Government assistance programs that help with food, utilities, and healthcare costs could help you free up cash to put toward your rent payments.

Eligibility criteria vary depending on which program you apply for and why you’re struggling. A housing counselor or your state social services agency should be able to help you figure out which programs you may qualify for and what you'll need to apply.

You can speed up the process by having documentation proving your financial hardship. This might include a notice from your employer stating that you no longer work there, or a large medical bill that you have to pay off. Many assistance programs also want to see proof of your monthly income and expenses, so preparing this ahead of time can help you get the money you need sooner.

Exploring Temporary Housing Options

Sometimes, you may have to change your living situation or even leave your home entirely if you can’t pay rent. It's important to understand all the options before making any moves.

Some ideas you can try:

• Sublet: If your lease allows you to, consider finding someone to sublet for a short time. This is when another person lives in the rental and pays the rent or a portion of the rent.

• Get a roommate: Adding another member of the household can ease the financial burden, because you can split the rent.

• Stay with friends or family: If you need a place to crash in the short term, reach out to family or friends to see if you can stay with them.

• Use community shelters: Community shelters can provide temporary housing, as well as food and basic hygiene resources. It’s a last resort, and no one looks forward to knocking on the shelter door. But it may be possible to drastically reduce your living expenses by giving up your belongings or putting them in storage while you work to find free shelter until you’re back on your feet.

Consider Your Options—Including Debt Relief

Difficulties paying rent are often part of broader financial hardships. You may need some extra help figuring out how to make ends meet, or deal with debts that have piled up. Financial counseling can often help with debt management. Debt relief is financial help that could significantly reduce your debts so your finances are easier to handle going forward. 

You can negotiate your debts on your own, but if you don't feel comfortable doing that, you can employ the help of a company like Freedom Debt Relief that has more than two decades of experience negotiating billions of dollars in debt. Schedule a free consultation to learn how it works and whether it's a good fit for you.

Once you've gotten your financial situation under control, consider building an emergency fund so you're prepared in case you find yourself unable to pay rent in the future.