Whether it’s a bad economy, an unexpected job loss or some other change, you might be tempted to stop paying rent. However, there are financial consequences that can impact you for many years after your decision. Think carefully about what could happen:
Not paying rent will result in you being charged a late fee. This is a big deal, and you shouldn’t treat it lightly. That money could be better spent on other bills, or it could go towards building up an emergency fund. Some late fees are as high as $50 to $75. That’s higher than a lot of local telephone and Internet access bills.
Just two months in back rent can exceed $1,000, and for many renters it can total more than $2,000. Paying rent on a monthly basis may be manageable for you now, but a lump sum payment of back rent could ruin you if you don’t have enough savings or if you live paycheck to paycheck. You might be able to delay the need to pay back rent until a judge rules against you, but you will have to pay it all at some point.
Your landlord can bring a lawsuit against you at their expense initially, but they can ask for those expenses back if they win the case. Fees can include court costs and reasonable attorney fees. You’ll probably have a rough time trying to pay for your landlord’s attorney fees if paying rent was difficult.
Liens on Bank Accounts
Some renters believe that they can just skip town and leave any court judgments behind. However, once there’s a judgment against you to collect payment, the landlord has many ways to get the money awarded. One way is to place a lien against your bank account. Do you remember giving your landlord your social security number when you filed a rental application? That’s all the information they need to get money from your bank account now and in the future until they collect the total amount of the judgment.
Missed Work Days
Taking off work to defend yourself in a eviction proceeding is not fun. If you still have paid personal days available to use, then it’s not so bad. However, if you’ve used that all up, you could lose work pay on the days you’re in court. Add to that legal fees and back rent, and you could find yourself in a financial crisis. Some employers may not let you take the time off without consequences, including firing you if they really need you to work on the days you request off.
If an eviction proceeding against you is successful, you’ll have to move. When you’re in a city far away from family or friends that have the extra room for your things, your only choice may be to rent storage space. A self storage facility may require only a one month’s rent, but that’s still extra cash that you have to pay as a consequence of not paying rent. That one month storage fee can quickly turn into two, three or six months if you live in an area where there aren’t many apartments with the same amount of storage you had before.
The financial consequences of not paying rent are not worth it in the long run. Before signing a lease agreement, make sure you can afford the apartment, and negotiate a shorter term lease if necessary.