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Here's What to Do If You Worry You Won't Be Able to Pay Your Rent Next Month

Twenty/20

Ximena Kilroe thought that she, her husband and a roommate had found the perfect apartment in February. The development in their Brooklyn neighborhood was brand new, offered plenty of communal space, including a rooftop deck, and splitting the $2,910 rent three ways was more than manageable.

But now, all three of the roommates have lost their jobs due to the coronavirus pandemic. Kilroe was furloughed this week from her position as a curatorial assistant for an arts nonprofit, and her husband and roommate are both bartenders. Kilroe is worried about how they'll pay the rent in the future.

They sent in a check for April, but with no income, little emergency savings and no idea when she will receive unemployment benefits, the 28-year-old expects to miss May's payment.

"I've never been in this position before of not having a job and not being able to pay my rent, and these conversations are really difficult," Kilroe tells CNBC Make It. "We're doing what we can with the resources that we have."

Kilroe is far from alone. Roughly 10 million Americans have filed for unemployment in the past two weeks, and as the U.S. heads into the first full month of pandemic-induced layoffs, campaigns calling to cancel rent and mortgage payments are picking up steam. As April 1 approached, "rent strike" began to trend online, as did the hashtags #CancelRent, #FoodNotRent and #KeepYourRent.

Little relief has come from the federal government. The CARES Act, the $2 trillion stimulus package passed by Congress last week, gives homeowners with federally backed loans two types of financial relief: It blocks foreclosure proceedings for at least 60 days and allows homeowners to defer mortgage payments for 180 days.

For renters, the CARES Act and many states and cities have banned evictions for the duration of the coronavirus crisis. However, no other broad relief has been made available to the country's 40 million-plus renters. Kilroe says New York's 90-day eviction ban does little to reassure her. She is hopeful that local and state governments will work out some type of legislation that temporarily helps both renters and landlords. 

Kilroe already gave her landlord notice for May's rent, and is hoping to work out a payment plan. Financial experts and landlords say that's a great first step for anyone worried about making their payments.

If you believe you won't be able to pay rent in the coming months, here's what they advise to do now.

Work out a payment plan with your landlord

Like Kilroe, you don't wait until rent is due to contact your landlord. Giving them as much notice as possible will make it easier to work something out together, and will, hopefully, indicate that you are acting in good faith.

"Part of the reason we wanted to reach out to them a month in advance is to say, Hey, we paid this on time this month even though we're all unemployed," Kilroe says. "That would be points toward us really wanting to make something work."

It is helpful to provide your landlord with documentation of your financial hardship, Leslie Tayne, founder and attorney at Tayne Law Group, tells CNBC Make It. That could be a note from your employer or evidence of your unemployment application. Once you have that, ask your landlord what options they can offer you.

"Ask if they can share your options via email or letter, so you have it in writing," says Tayne. "If you are offered a rental-deferment plan, make sure it's in writing as well. Thoroughly read and understand the terms before signing and agreeing to them."

Another option is to approach your landlord with suggestions for how you will repay them, says Colin Cook, who rents out a home in Portland, Oregon. Tenants and landlords need to work together for their "long-term mutual benefit," Cook says. He encourages tenants to share details about exactly what they are experiencing so that their landlords will hopefully be more understanding.

"Nobody wants to just get a text or email saying times are tough and we need help," Cook tells CNBC Make It. "What is your runway on finances? When do you think you might need help if it's not right away? Be as honest and open as you can, because this will help your landlord plan too."

What you're offered will depend on your landlord, but ideally you will be able to work out an installment plan over multiple months, Mike Desepoli, vice president of Heritage Financial Advisory Group, tells CNBC Make It.

Desepoli suggests asking for a reduced rate over the next three months, with the ability to repay the rest of the amount over a specific amount of time.

"We know everything is negotiable, especially now," says Desepoli. "The last thing a landlord wants to do right now is find a new tenant, so they may be more flexible to keep the tenant they already have."

If you can't work something out with your landlord, Tayne suggests going to the Department of Housing and Urban Development's website to view the government's rental assistance resources, including any local financial assistance programs. Catholic Charities and your local Salvation Army may also be able to offer renters support, she says, and you can call 211 to get in touch with the United Way, which can help connect you to organizations that can help.

Kilroe is thankful her landlord seems open to working with her and her roommates and is hopeful some type of government relief will be worked out for renters.

"Everything is just out of our control," says Kilroe. "We have to take it day by day and be as empathetic and generous with other people as we can be."

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