What to Do If You're Unable to Pay Rent for Your Apartment
It can happen to anyone.
You applied for an apartment that you thought you could afford. You moved in.
Things went great for a while, but then something happened.
Maybe it was a family tragedy. Maybe you lost your job or were unable to work. Maybe it was a mix of things. Whatever the reason, you don’t think you will be able to make rent this upcoming month.
Being unable to pay rent is no laughing matter. It means that you are staring down serious problems like homelessness, destroyed credit, and eviction.
It’s normal to be afraid, but that doesn’t mean that you are helpless.
If you are not sure what to do, this guide will help you weather the storm.
What to Do If You're Unable to Pay Rent
- If you're unable to pay rent, it can lead to eviction and problems on your credit report.
- Depending on why you are not able to pay rent, you can find solutions such as filing for unemployment, digging into your savings or assets, taking on a roommate, or borrowing from friends or family.
- Taking out a loan or cash advance may be an option, but there are caveats to be aware of if you choose to do so.
- Reaching out to government programs and non-profits is also an option. NYC has a few programs like One-Shot Deal to help people pay emergency rent.
- If you absolutely cannot come up with the money, you should speak with your landlord and try to make other arrangements. It's not in your interest to miss a payment and not speak to your landlord about it.
- Purchasing Rent Guarantee Insurance can help prevent these mishaps from happening in the future.
Solving Your Rent Problem
Before you can do anything, you have to take a good look at your situation. You might have more going in your favor than you believe.
If you can leverage the right perks, rent might not be a problem for much longer.
Did you just get laid off?
Getting laid off might be terrible, but there’s a silver lining to this you may be overlooking. If you worked for more than six months on a full-time, non-contract basis, you are entitled to unemployment.
Ask yourself if you’ve filed a claim for unemployment yet, and if you haven’t, it may be time to file a claim.
Unemployment payoffs can be just what you need in order to make ends meet. In New York, you also may be eligible for the Self-Employment Assistance Program, which also offers similar financial benefits to UI.
You can learn more about New York’s unemployment programs on the official New York State Unemployment Insurance site.
Do you have savings?
Ideally, everyone will have at least a couple thousand dollars sitting in a bank when they move in.
If you have any money stashed away in savings accounts or investment accounts, now is the time to withdraw them.
It’s better to be broke and have a roof over your head than be broke and homeless.
Were you a victim of domestic violence?
Domestic violence and abuse are legitimate reasons to break a rent agreement in the state of New York.
They are also valid reasons to get special assistance through UI as well as special housing assistance.
If you are in this situation, you really need to talk to a social worker about your options.
It’s also worth pointing out that landlords are very sympathetic to those who are fleeing domestic violence.
You can call 311 to find out if you can break a lease or get assistance after dealing with domestic abuse at home. In most cases, you will get the help you need.
Can you pick up extra work?
Never underestimate the importance of being able to work when you’re facing serious financial problems.
New York City has plenty of places that are hiring people looking for a quick buck.
If you are able to work, you may be able to get a quick gig like Uber or Lyft to pay for the money you’re lacking.
Can you pick up a roommate?
Not all apartments will allow you to rent a room or pick out a new roommate. However, if you are given that right, now is the time to consider it.
A roommate or a sublease will allow you to get enough financial cushioning to pay rent on time.
However, remember that getting a roommate might be a little bit more involved than you think.
To learn more read up on our Guide to Room Shares in NYC.
Can you borrow money?
If you have parents willing to lend you cash, or if you have a credit score that’s good enough to get a loan for your rent money, you’re in luck.
This is a valid option to consider if you’re certain that the financial struggles will be temporary.
Should you take out a personal loan to pay rent?
Though it may be unorthodox to do so, there have been cases where people have been able to scrounge up rent money through a personal loan.
The problem with this matter is that you’ll still need to pay it back and that most personal loans that are available to borrowers will take at least a month to clear.
Three personal loan types that people can rely on for fast cash is a payday loan, a cash advance, or a peer-to-peer loan (P2P).
Payday loans are loans that don’t have a credit check but have astronomically high-interest rates.
Everyone can qualify as long as they get a steady paycheck, and the money comes out rather fast.
However, the interest rates are what get you.
This can lead to serious debts later on, and in many cases, borrowers may not be able to get out due to the interest rates overcoming everything.
Many payday loan companies make it nearly impossible to pay off your debt with compounding interest and have been featured in several docuseries and targets of class-action lawsuits because of their predatory lending practices.
Cash advances from a credit card account might be a quick way of getting cash but are not without its drawbacks.
The interest on cash advances is notoriously high.
So, unless you know you will be getting paid at a later date to pay off your advance, expect high surcharges on your account and will continue to compound every month until you pay it all off.
A peer-to-peer loan from companies like Lending Club is great if you have decent credit. Like a personal loan from a bank, P2P loans require a hard pull on your credit.
However, it may be worth it to you. Different P2P lenders will have different rates, which can be lower can credit card rates.
Furthermore, you can get a loan commitment the same day with funds being sent between 2-14 days, which is significantly quicker than a traditional lender.
However, just like any other loan or cash advance, you are putting yourself further into debt, so it's important to put together a plan to pay the money back.
Are the housing conditions safe, sanitary, and legal?
Most apartments in New York City are safe and sanitary, but not all are.
By law, you are entitled to a safe apartment that is up to code.
If you regularly complained about fire hazards, non-working heat, non-working outlets, or an extreme pest problem without the landlord helping out, you may have a right to withhold rent.
Technically, landlord negligence is considered a breach of contract. If you tried to keep up the apartment and the landlord has neglected to do his share, you may have the right to withhold rent or bail on the apartment.
If you have paid money to fix issues that are really the landlord’s issue, you may be able to use that as leverage to pay less rent this month.
However, it’s best to talk to a renter’s assistance group before you try to use this plan.
Coming Up With a Plan
Trying to avoid eviction is all about knowing what approach to take, and doing what you can to ensure you are able to keep your apartment.
Once you have all the factors lined up, you can figure out what to do and how to avoid getting on your landlord’s bad side.
Here’s what you should consider while putting things together…
Should I look for government help?
If you are in a dire situation that is not of your own doing, you absolutely should look into New York’s assistance programs.
Domestic violence, unemployment, low self-employment numbers, and other similar issues qualify you for state assistance in many cases.
Before you panic, take a look at the government rent assistance programs you can access online.
New York City has far more assistance programs than most other cities, and talking to the right people may be all you need to do in order to afford rent.
What nonprofits can help me out pay the rent?
A better alternative for people who want to get their rent paid is to reach out to one of New York City’s nonprofits or housing programs. Many of the programs in the city are taxpayer-funded and are designed to help give people the financial assistance they need in order to stay living in the Big Apple.
Some of the more impressive nonprofits include:
- NYC HRA Rental Assistance. The Human Resources Association has an entire department to help people who are housing unstable. They have multiple programs, including CityFHEPS, that are designed to help you avoid evictions.
- Plumfund. Plumfund is a crowdsourcing platform that’s specifically designed to help with major life expenses and emergency funds. If you have a lot of friends, then Plumfund would be a great way to make rent happen.
- A One-Shot Deal. New York City also grants a one-time emergency fund that’s meant to carry you through unforeseen circumstances. It can be used for food, housing, or emergency medical bills. If you take this option, make sure it’s your only way out. It is a one-shot deal, after all.
- Homebase. Homebase isn’t just one option, it’s a bunch of them. This is a series of community outreach programs that include rental assistance, housing referrals, and financial coaching. There are Homebase operations in almost every major portion of New York City. Qualifications vary based on your income, living area, and family size, so make sure to ask what they can do to help.
Should I consider not telling them?
It all depends on whether you were able to make more money, get a loan, or have someone spot you enough cash.
If you did, good job.
You don’t need to mention it to your landlord.
Generally speaking, if you are able to find a way to make ends meet using the methods above, there’s no reason to raise concern in the landlord’s mind.
On the other hand, if this has not been the case, you will need to talk to them and alert them of the situation.
Many landlords will give you a grace period if you tell them the situation and are willing to put down some money towards rent.
Should I just pay it late?
If it’s just a matter of bad timing, you might be able to get away with paying your rent late.
That being said, it’s ideal to do your payments during the grace period mentioned in your rental agreement.
If you can’t, you may need to pay an additional fee.
If you wait more than 30 days, you will most likely be evicted.
Can I use my deposit to cover for rent?
Most likely, this won’t be doable.
Landlords hate using their deposits unless it’s for repairs or as part of the eviction process.
Rental deposits very rarely are used as payments unless it’s the first or last month of your lease.
Besides, don’t you want to have something given back to you when you leave?
Can I sublet my apartment?
Believe it or not, quite a few people have sublessed a room in their apartment as a way to pay their own rent.
Even putting a room on AirBnb can be a smart way to ease the financial burden of rent while you recover.
Read over your lease contract.
If it allows it or doesn’t mention anything, give it a shot.
Of course, this isn’t always doable in the long term and many rental agreements strictly prohibit it from happening.
Should I consider bartering or talking about living conditions with my landlord?
Many apartment buildings have tons of work associated with them.
If you’re short on cash and willing to do some handyman work, you may be able to barter with your landlord about being a property management assistant.
They may be willing to lower your rent.
People who have been living in substandard conditions can also use payments they made towards repairs as a form of bartering.
If you have documented evidence of the neglect and receipts indicating the repairs you paid for, you may be able to get a rent drop until the landlord fixes the issues.
Of course, this can also be fairly risky, since landlords aren’t legally required to barter with you.
You may want to do this as a last resort unless you are fine with walking away from your apartment.
Final Tips and Tricks
How should I approach my landlord about this issue?
The best way to approach your landlord about your rent issue is via writing, with plenty of tact.
Explain, in detail, why you can’t afford rent this month.
Emphasize that the struggle is temporary if it is, and if it isn’t, offer to pay what you can afford.
At the end of the day, landlords are human.
They get that living in New York City is not easy, and they don’t want to go through the hassle of finding a new tenant.
Tell them that you are willing to work out a deal as soon as possible.
You’ll be surprised at how well things will work out if you’re smart about it.
Should I have a backup plan?
Absolutely, if you can put one together.
If you aren’t sure whether or not you will be evicted, and you couldn’t make rent, you need to take a look at a Plan B.
Ideally, you may get some aid from Social Services that could let you keep your place.
If you can’t, you may want to ask friends if they would be willing to take you in.
A backup plan is never a bad thing to have.
It may be what saves your life.
What do I do if I got served an eviction letter?
This is the worst-case scenario, and you’re right to be a little freaked out if you run into this issue.
Thankfully, eviction also has rules associated with it and if your landlord tries to evict you illegally, you may be able to have a court case rule in your favor.
An eviction notice needs to be formally served to you.
If you do not get an eviction notice and pay the rent debt off before you receive it, the eviction can’t go through.
Things like having a landlord lock you out of your home without notice can be grounds for a lawsuit.
Though there have been cases where people were able to win against landlord evictions in court, this is not something that you should attempt without serious schooling.
It may be a good idea to look into a lawyer or simply agree to walk away from the apartment before the notice hits courts.
How can I prevent this from happening in the future?
Times are tough, and that’s no joke. Even the most stable job can disappear into a puff of smoke at a moment’s notice.
That’s why a new industry called Rent Guarantee Insurance is starting to take hold in New York City.
This is a type of insurance, paid by the renter, that covers financial hardship when it comes to rent payments.
The way it works is simple.
You pay for Rent Guarantee Insurance ahead of time. If you lose your job or otherwise can’t make ends meet, the insurance policy will pay your rent for you for the time explained in your insurance contract.
Generally speaking, RGI policies have an annual fee equal to a single month’s rent.
Once the rent is paid, the insurer will discuss repayment terms with the renter. Currently, the most popular name in NYC for this type of insurance from Insurent.
They call it their Lease Guaranty Program.
Another popular service comes from TheGuarantors, who currently service New York City as well as other major metropolitan areas in the United States.
Despite these services, the best way to ascertain your ability to pay rent in the future and not put yourself further into debt is to build your savings.
You should have a healthy financial security cushion; enough in your savings account to be able to pay for rent for six months or more.
Saving that kind of money doesn't happen overnight. However, with careful monthly budgeting, over time you can build your equity.