Dos and don’ts if your college roommate isn’t paying the rent on time

Nine times out of 10, the reason your roommate has stopped ponying up their share of the rent is because they don’t have the money to pay it. This isn’t fair and you haven’t done anything wrong. But it means that you’ve got a problem on your hands.

If you’re an empathetic person, it’s tempting to slip into “fix-it mode” — it’s normal to want to help your roommate. But their financial issues aren’t your problem, and if you’ve been covering their portion to avoid conflict with the landlord, it’s time you get real.

Use facts, not emotions, to evaluate if the scenario is just temporary or if it’s going to be a persistent issue. You can still be kind to them while setting firm boundaries about all this money business. This approach will hopefully keep you out of small claims court, and maybe you’ll still be able to maintain your friendship in the future.

You’ll want to agree on a specific date when they’ll get caught up on what they owe you, and get a firm commitment that slipping up on paying the rent won’t happen again. Though it’s not your responsibility, if you learn that they’ve never budgeted before, you could share a template with them. Sounds like they need it!

You might as well have a talk about the other utilities costs they owe, and if they’re behind on paying those, get a plan on a page (with signatures) for how they plan to catch up. The last thing you want is your household internet getting cut off when you’re studying for exams because they are the account holder, didn’t pay the bill and now you’re hooped again!

Going forward, ensure the utilities are listed in the name of the most responsible person in the house. Though paying utility bills doesn’t help build your credit, not paying them can result in these going to collections, and that can negatively impact your credit.

Now, about getting the money back that they owe you, try one (or a combo) of these ideas.

Can they borrow the money from an alternative source?

Lord knows the only reason you paid their share of the rent in the first place was to ensure your landlord wouldn’t kick you out for non-payment, and perhaps so they wouldn’t have to ask their parents. Now you’re annoyed that you somehow became their bank. Not cool!

Press your roommate to find another way to borrow the money, both for rent if they anticipate being short again and to pay you back. You need to make it clear that this isn’t your problem, and they need to find the solution. Insist they speak to their parents about their situation (reiterate that they are also responsible if they co-signed the lease), take a loan from the bank, borrow from another friend. Whatever! This strategy shifts the financial burden back to them.

If they ask you to co-sign on a loan or take money out on a cash advance for them, “hell no” should be your response. The goal is to untangle your finances from this person as much as possible because, clearly, they can’t manage their money commitments.

Could you arrange a flexible payment plan?

Let’s say they owe you $3,000. Could they repay you $500 from each of their upcoming pay cheques until the debt is cleared (that would be six pay cheques if you don’t charge interest). You don’t have to reduce or eliminate any part of the debt with this solution. That isn’t fair to you. This is about getting all your money back, but over a longer period of time — still annoying, but could mean the difference between being repaid or not at all.

Exchange for something that’s valuable, and that you can potentially sell

It’s just like what the banks do — take collateral. If you don’t pay your car loan, the bank repossesses your car. Does your roommate want to pay off their debt by exchanging something of value with you? This might actually work really well for you, especially if you need something they have and are looking to buy it anyway. Of course, this solution only works if you can afford to go without the cash.

If it’s a persistent issue

Let’s say they’re totally out of work with no real prospects, or they seem to be spiralling into an overspending spree, or have money for other things but not the rent — it’s time for a more serious talk.

You might need to let them know that, if they can’t get back on track soon, moving out could be the next step. And yes, they still owe you for what’s outstanding, and would be responsible for finding someone to take over their lease.

If none of these above options work, and your roommate isn’t being reasonable about finding a way to pay the rent and pay you back, let them know you’ll be calling the landlord, explaining the situation, and seeing if there may be a way for you to get yourself out of the lease. Sometimes walking away from a toxic situation is the very best solution. Experienced landlords have seen this movie before, and they may be willing to terminate your lease early, or come up with an alternative solution.

I realize it’s difficult to keep the communication going when you’ve got a roommate who isn’t paying the rent on time. While you try to work things out my best advice is to be fair, firm and polite — that doesn’t mean being nice or bending over backwards. This is about being assertive and standing up for yourself — and hopefully getting your money back.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.