Home > Managing Debt > What Happens If I Stop Paying My Rent?

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Rent is one of the largest monthly expenses for most people and, as a result, dictates the budgeting process.

It’s common knowledge you can get kicked out of your place if you fail to pay (that’s usually spelled out pretty clearly in rental agreements), but eviction is only one of the negative repercussions delinquent tenants may encounter. Consumers should always opt for housing well within their budgets, because there are long-lasting consequences for failing to pay rent.

What to Do If You Can’t Pay

The obvious first option when you discover you can’t pay your rent is to find a more affordable place. Before you start apartment hunting, make sure you understand the terms of your lease, said Gerri Detweiler, Credit.com’s director of consumer education.

“People think that if they have trouble paying the rent they can notify the landlord they’re leaving,” she said, saying a lot of people thing moving out is the solution. “If you signed a lease, you may be responsible for the remainder of the lease, plus any damages.”

If you can cut back on anything in your budget, it’s worth it to avoid eviction, Detweiler said. You should also see if you can find additional sources of income.

That’s not always easy. At the same time, you don’t want to stop paying and wait to see what happens. Reach out to your landlord to see if you can work out a payment arrangement, Detweiler said. You may also be able to find an organization in your community that provides emergency rent assistance to people facing eviction.

Do a little research into your state’s tenants’ rights, too. You may be in a vulnerable position, but don’t let the stress of the situation overcome your need to protect yourself. Every state is different, but landlords can’t just do whatever they want when you’re not sending them rent checks. For example, in New York state, a landlord has to take the issue to court before evicting a tenant, and even then, the court order has to be carried out by law enforcement. The landlord can’t lock you out, threaten you with violence or seize your property. At the same time, tenants can’t play dumb and hope to escape eviction: Even if you don’t read the papers notifying you of legal action and don’t show up in court, you can still get evicted.

That’s just one example of where skipping rent payments might get you, and while the issue may seem complicated, it’s not something to ignore. Here are some other, longer lasting implications of not paying your rent.

You’ll Have Trouble Renting Again

Landlords and property managers want tenants who pay the bills. When you move to a new place, the rental application often asks you to provide previous addresses, former landlord contact information or personal references. If you’ve been unreliable with rent before, you may have trouble renting another place.

Many landlords don’t report rent payments to credit bureaus, but housing providers review applicants in various ways. There are many tenant scores available, according to a report on consumer scoring from World Privacy Forum, and those scores use a combination of credit report and public data to assess the risk potential tenants pose to landlords. (There are hundreds of consumer scores out there. Here are some of the lesser-known ones.)

Unpaid Rent Can Trash Your Credit

Say you go a long time without paying rent. You’re probably looking at eviction, but your landlord is also likely to try and collect the money you owe. Perhaps he or she will hire a collections agency to do so, in which case you’ll see a collections account appear on your credit report.

You may also face legal action. If your landlord sues you for the unpaid rent and wins, you’ll receive a judgment ordering you to pay the outstanding balance. Judgments (explained here) are matters of public record and appear on your credit report, which will have a big negative impact on your credit standing.

Collections accounts and judgments can cause serious financial problems. No one likes dealing with debt collectors (and you should know your rights when doing so), and the damage they do to your credit scores can be very costly: People with poor credit may have trouble accessing financial services and pay more by way of higher interest rates and potentially elevated insurance premiums.

These problems can last for years: Collections can stay on your credit reports for 7 1/2 years from when you first fell behind on payments, and unpaid judgments can be reported for even longer, depending on the statute of limitations in your state. (Once judgments have been paid or settled, they can be reported for 7 years from the date the judgment was entered in the court.)

You can see exactly how not paying your rent will impact your credit scores — Credit.com offers two credit scores for free, along with tips to help you improve them, tailored to your situation — and there are some steps you can take to avoid rent-induced credit troubles.

More on Credit Reports and Credit Scores:

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  • MidnightGamer MG

    i agree with you on the maintaining your property, but justifying stealing from your landlord thats screwed up, no matter how bad he is at the end of the day your stealing and that makes you alot worse than him,at least he is providing a service, but when you dont pay for rent your a thief no better than the men who rob banks and mug people in the streets, i just wanted you to understand your trying to justify stealing from another person, i have been poor i understand how it is i personally lived out of a van for 2 years while saving up for the houses i bought but never once stole a single dime from another person, i worked on these 2 houses i own everyday, while eating roman noodles and vienna weighnes, and when i see someone talking about how to screw over people like me, that have suffered and worked to get were they are, it just makes me lose a little hope in humanitty, no matter your responce i telling you this because i think you needed to hear it,to no that you are not the only person in this world who has had it rough, and that you are stealing from people who also have lives, and that have made sacrifices to get were they are, i hope that you can change i hope that you learn to understand what you are doing, and i hope the best for you, that you will learn to see the world from a prospective other than your own, and you will use that to help someone as i have attempted to do today

  • Jeanine Skowronski

    Generally, you can’t be arrested and jailed for debts. (A judge can issue a bench warrant for your arrest if you fail to appear in court when ordered to, so if someone is suing you due to an unpaid debt, that’s something to be aware of.) As far as the repercussions, the landlord could potentially file suit for whatever is owed, which could ultimately result in a judgement against the lease co-signers. And a judgement can lead to garnishment of wages or assets. (There are some restrictions regarding what can be garnished and some protections for consumers undergoing hard ship, but they vary by state.) Beyond that, there are credit scoring consequences.

    In any event, you may want to see if you can work out a payment plan for what is already owed and also see what your options are regarding getting out of the lease. This article could be of help:

    http://blog.credit.com/2015/08/the-right-way-to-break-an-apartment-lease-122342/

    Thanks,

    Jeanine

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