George Simons | October 19, 2022
Summary: If you owe on an old apartment debt, you could find yourself being sued by debt collectors for it. Apartment debt can stay on your credit report for seven years, so it's important for you to learn how to respond to debt collectors and fight an apartment debt collection lawsuit. SoloSuit can help you respond to a lawsuit in minutes and win in court.
Statistics show that 5.7 million households in the US have an overdue rent payment, also known as rent arrears. If that's what you're experiencing at the moment, how you plan to deal with this debt will influence your credit report, even though rent payments are generally not reported to the credit bureaus.
In this article, we will cover some of the best ways to handle an old apartment debt to avoid damaging your credit and how to respond to a debt collection lawsuit.
Let's jump right in.
Terminating a lease has its consequences, and it's also one of the hardest decisions to make. For example, you may be running behind on your rent while dealing with many other financial issues. Or maybe you need to move to a new city for important reasons such as work. Whatever the reason, you may end up accumulating debts in rent arrears.
Ideally, breaking your lease won't reflect on your credit report, but it can still affect your credit scores in the future. Here's what you need to know before deciding to terminate your lease.
Breaking a lease may not impact your credit, but the debts that come with it could. If your landlord hands over your arrears to debt collectors, it'll be treated like any other debt in your account. Once you fail to pay the debt and the collectors report it to the credit bureaus, your credit score will be significantly affected.
But how long does apartment debt stay on a credit score? Keep reading to find out.
If your old landlord or apartment complex is suing you for several missed payments, they might hire a debt collector to help. Debt collectors can report collection accounts to the credit reporting agencies, and such information may remain on your credit report for up to seven years.
That's right—apartment debt will stay on your credit score for seven years.
As long as the debt remains unpaid, the collection account will continue to affect your credit score. Once the debt is cleared and the collection company informs the credit bureau about it, the account will be marked as paid. However, it may remain in the report until after the seven years but with a lesser impact on your credit score.
That being said, there are some things you can do to prevent hurting your credit score with apartment debt. Check your lease agreement before terminating and you can avoid a damaged credit score and relentless debt collectors.
Your lease may have a provision for what you need to do when you want an early termination. In addition, it may include guidelines on the termination procedure and the fees you'll need to pay.
For example, your lease agreement may require you to give up your security deposit or pay an amount equivalent to two months' rent and additional termination fees.
If the lease agreement has no such provisions, the laws of the state will be applied. Although these laws vary from one state to another, most states allow landlords to find a new tenant to replace you as soon as you issue a notice.If the landlord fails to get a tenant, you may be required to continue paying the rent for the remaining lease period or until a replacement is found.
This is often the beginning of old apartment debts that can lead to the following problems if left unpaid:
Let's take a look at an example.
Example: Peter, who lives in California, fell behind on his apartment rent payments during the COVID-19 pandemic. He eventually terminated his lease early to move back in with his parents while he recovered financially. After several months, he was contacted by debt collectors about the debt. He still wasn't in a position to pay it off, so he ignored them. Eventually, Peter found out he was being sued by the collectors for the debt. He used SoloSuit to file an Answer to the lawsuit, which bought him time to negotiate a debt settlement with the collectors who let him set up a payment plan to pay off the debt.
Suppose you've been sued for an old apartment debt. In that case, you can use SoloSuit to file a response in just 15 minutes. SoloSuit's services include a software that helps you draft a strong Answer to the lawsuit plus filing with the court and delivery to the other parties in the case.
Settling apartment debt may seem intimidating, but the sooner you settle, the easier it will be for you. You don't want to wait until a collection agency reports your debt to the credit bureaus to do something about it. Here are ways to settle your old apartment debt:
The simple answer to whether you should pay your old apartment debt is: Yes! Like any other debt, your credit score can be affected by apartment arrears, which could also ruin your chances of ever renting a property in the future.
If your old landlord is contacting you about the debt, you can pay them directly as you have in the past. If you can't afford to pay off the full debt right now, you can also discuss setting up a payment plan with the landlord, if possible.
When the debt is transferred to debt collectors, the process for paying it off is very similar. You can pay the debt in full or set up a monthly payment plan that fits your financial needs.
If you aren't sure that the debt amount is correct, you can try sending a Debt Validation Letter to the collector. This will force them to validate your debt before they keep contacting you about it. If they don't have the proper documentation or evidence to prove you owe the debt, they might leave you alone.
When served with a debt collection lawsuit, you'll need to respond to it within the timeframe provided by the law. In the US, you have up to 35 days to respond to an apartment debt collection lawsuit, depending on where you live. You must respond with a written Answer within your state's deadline, or you will automatically lose the case.
An apartment debt collection lawsuit begins when you receive the court Summons and Complaint documents. The Summons is the official notification that you're being sued, while the Summons lists the specific claims against you.
Follow these three steps to draft your Answer to a debt collection Summons and Complaint:
Check out this video to learn more about how to respond to a debt lawsuit:
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now or are just looking for support, we're here for you.
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
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Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.