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If you're unsure whether you can make your next rent payment, you're not alone. More than 22 million households are spending more than 30% of their income on rent and utilities, and a record-high 12.1 million spend at least 50%, according to a Joint Center for Housing Studies of Harvard University report.
If paying your rent stretches your finances to their breaking point, there are things you can do. Here are six steps to take if you can't afford rent.
1. Review Your Lease
If you're struggling to come up with your next rent payment, the first thing you should do is review your lease. It will have information about whether there is a grace period for making late payments and if your landlord charges late fees. Your lease also includes information about whether you can sublet your apartment or invite a roommate to move in to get some financial relief, plus how much it would cost to break the lease if you decide that's your best option. Understanding the terms can help you decide what to do next.
2. Contact Your Landlord
If you're unable to pay your rent, let your landlord know before the payment is due. They may be willing to work with you to develop a repayment plan. It's best to give them as much notice as possible. Don't wait until after you miss a payment to talk with them.
3. Seek Emergency Assistance
It can be scary to realize you may not be able to pay your bills, but you don't have to go through it alone. Many state, local and tribal organizations have resources to help renters in a tight spot. Check with your local or state government offices or search online to see what's available in your area. You can also contact local nonprofits and community programs directly. Programs and services vary by location, but they may be worth checking out.
If you're unsure where to begin your search, calling 211 can help. This national organization was designated by the Federal Communications Commission as a resource that connects callers to local sources that may be able to provide social services, including rent assistance. They can also offer resources if you're struggling to access other essentials like food, utilities or health care.
4. Know Your Rights
If you're worried about losing your home, it's crucial that you understand the laws in your state. Your landlord must adhere to all applicable laws during the eviction process, and you may have certain protections, depending on where you live. The Pew Charitable Trusts and Stanford Law School have created a searchable database where you can learn more about your area's housing, eviction and rent laws. If you need help navigating the legal landscape, a housing counselor can help educate you on your rights and potential financial assistance for which you may be eligible. The Department of Housing and Urban Development lists its approved housing resources on its website.
5. Consider Moving in With Friends or Family
If you won't be able to catch up on your rent payments in a month or two, you may need to make alternate living arrangements. Moving in with a friend or family member may not be your ideal living situation, but remember that it's temporary.
Friends and family may be willing to cut you a break on rent and other expenses while you get back on your feet. Sharing the cost of rent, utilities and other living expenses can free up room in your budget to help you avoid missing other payments. Staying current on your other financial obligations can help keep your credit in good standing.
6. Find a Lower-Cost Place to Live
If moving in with friends and family isn't an option, consider moving to a smaller unit or less expensive area where rent is more affordable. You may also want to look into long-term government assistance, such as government-subsidized public housing or the Housing Choice Voucher Program.
If you're eligible for the Housing Choice Voucher Program, you can use your voucher for any housing that meets the program's guidelines. The landlord receives a partial payment through the program, and you are responsible for paying the difference.
Frequently Asked Questions
If you're at risk of not paying your rent, you probably have questions about the potential impact a missed payment will have. Here are answers to a few commonly asked questions.
Rent and eviction laws vary by state, but generally, here's what you can expect. If you miss a payment, your landlord typically sends you a notice that tells you how long you have to pay your rent before they'll file for eviction. This is the first step in the eviction process.
If you get current on what you owe, the landlord will stop the eviction proceedings. If you don't, they may file for eviction.
Both you and the landlord must attend a court hearing where you both get to explain your side of the situation. At the end of the hearing, the judge will decide whether the eviction may proceed. If the judge allows the eviction to move forward, you must move out or appeal the decision.
It depends. Some landlords may accept credit card payments, but they usually charge more to cover processing fees. If your landlord doesn't accept credit card payments, you may be able to pay with a credit card through a third-party service. These services usually charge a transaction fee.
Many landlords don't report rent payments to the credit bureaus. However, missing a payment can affect your credit. If you signed up for a rent reporting service to help build your credit, a late payment will be reported to the credit bureaus, which can decrease your credit score. Additionally, if your landlord tries to collect what you owe and sends the account to a collection agency, it may show up on your credit report. Collection accounts remain on credit reports for seven years.
You can check your Experian credit report for free anytime to see how your financial habits are affecting your credit.
Rethinking Your Finances
If you're struggling to pay your rent, help is available. However, if your inability to pay isn't the result of a short-term setback, such as a job loss, you may need to rethink your overall financial situation. If you need help, a nonprofit credit counselor can take a holistic approach to review your finances and suggest changes you can make to improve your financial footing.