Personal Finance

Millions of Americans may not be able to pay their rent in October. What to do if you're one of them

Key Points
  • The coronavirus pandemic has made it difficult for many Americans to generate income and, as a result, pay their rent.
  • As many as 35 million people in the U.S. could face eviction.
  • Here's what to do if you're at risk of losing your home.
Siraj Ahmad | iStock | Getty Images

Jasmine Johnson is constantly afraid of being evicted from her house in St. Paul, Minnesota. The single mother of five children, all under the age of 13, hasn't been able to earn enough during the pandemic to stay caught up on her $1,350 rent. 

First, the daycare where she worked slashed her hours. Recently, she was re-hired at a family shelter as a client advocate, but has now come down with symptoms of the coronavirus and needs to quarantine. 

"I'd have to call shelters to be on the waiting list," Johnson, 31, said. "But you don't know when your name will come up.

"It's really hard to be homeless with five kids," she added. "It's going to be cold out." 

The coronavirus pandemic has made it difficult for many Americans to generate income and, as a result, pay their rent. As many as 34 million people in the U.S. may be at risk of eviction, according to a new analysis by global advisory firm Stout Risius Ross. Around 1 in 6 renters were behind on their payments in September. That pattern is likely to continue in October.

"The United States is facing the most severe housing crisis in history," said Emily Benfer, an eviction expert and a visiting professor of law at Wake Forest University.

At risk of eviction? 

Most tenants struggling to pay their rent will be allowed to stay in their homes until the end of the year, thanks to an announcement by the Centers for Disease Control and Prevention last month that made evictions for nonpayment illegal. 

You'll need to attest on a declaration form that you meet a few requirements, such as expecting to earn less than $99,000 a year in 2020. Documentation usually won't be required. 

"If a tenant cannot pay the rent, they should provide the declaration to their property owner as soon as possible," Benfer said. 

Try to give the form to your landlord in person and make sure to keep a copy for yourself. 

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Unfortunately, some landlords appear to be misinterpreting or ignoring the CDC's ban and continuing to file evictions anyway. 

Jim Baker, executive director of the Private Equity Stakeholder Project, has identified more than 3,500 new eviction cases filed by corporate landlords since the moratorium was announced on Sept. 1. 

"These evictions by private equity firms and other corporate landlords threaten the health of their residents and the broader public," Baker said. 

Another problem is that states are interpreting the CDC ban inconsistently. (For example, the CDC doesn't say anything about renters needing to provide documentation to prove that they qualify for the protection aside from the declaration form  but, in Maryland, evidence may be required.) 

If you're facing an eviction, you want to first try to understand what protections are available to you. In addition to the CDC ban, some states have issued their own rules around the proceedings.

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Try to get a lawyer before your hearing. One study in New Orleans found that more than 65% of tenants with no legal representation were evicted, compared with fewer than 15% of those who did have a lawyer. 

Sometimes the paperwork you receive with your hearing date will have the contact information for legal services in your area. If not, you should be able to find your agency online, said Alexis Erkert, a lawyer at Southeast Louisiana Legal Services. 

"The court may also be able to give people contact information," Erkert said. 

You can also find low-cost or free legal help with an eviction in your state at Lawhelp.org.

No matter what — and whether it's by telephone, over video or in person — try to be present at your hearing, Erkert said. 

"A lot of tenants don't show up, which means they will get a default judgment against them," she added. "If they show up, many judges will at least give them extra time to move." 

Other options 

Meanwhile, at Justshelter.org, you can search for community resources for people at risk of eviction. And some states and cities have funds allocated to help people stay in their homes. 

Arizona earmarked $5 million for that purpose. Residents in Delaware can apply for up to $1,500 in rental assistance. Similar relief measures were made available to those in MontanaOhioIowa and New York.

If you're accepted for the assistance, make sure to let your landlord know right away. Many landlords are showing a willingness to work with tenants who ask for payment plans, experts add. 

Some tenants are using their credit cards to cover their rent. Few landlords or property managers accept plastic, so you'd have to find a third-party processor, such as PlastiqPaypal or RadPad

"Their pitch is that you could pay them with a credit card and then they would mail a check to your landlord or send an electronic funds deposit," said Ted Rossman, an analyst at CreditCards.com. 

But this option should only be used in dire situations. The companies charge a fee (up to 2.85%, Rossman said), and then if you can't pay the credit card balance off immediately, you'll be dinged with interest. The average rate on a card is currently around 16%. 

Other ways to come up with rent can include borrowing from family and friends or from your retirement plan, Rossman said.