Is a payment plan any better or different than an eviction judgement?

Question

I am a PA landlord and likely starting down the eviction path for the first time in 12 years. I informed my tenant their lease ends at the end of the month and am serving a 10-day pay or quit notice tomorrow. I offered the tenants an opportunity to establish a payment plan in lieu of an eviction and judgment if they leave at the end of the month without causing damage. Is that a good idea or does it even matter?

I am assuming that a judgment will be difficult or impossible to collect. Likewise, a payment plan may also be a fantasy. I am hoping the carrot of avoiding the eviction impact to their credit moves them along. Is there anything about a separate agreement to pay a debt that is more likely to succeed? I can't think of a reason for why it would, but thought I would ask the community experts.

Theresa Harris · Answer

Once they are out of the property, you can't do anything with an eviction.  You can take them to small claims court for back rent, but even if you get a judgement in your favour, the chances of you seeing the money are slim. you can get then get it out on their credit history.

Best option if they are behind in rent (not 1-2 days, but over a month) is to get the out as quickly as possible.

Stuart Udis · Answer

@James Mc Ree Prioritize possession above all else. Payment plans are often just kicking an issue down the road to be dealt with later & judgments are as worth as much as the paper they are written on in most instances. Also make sure you are properly prepared. In Philadelphia this means  having an active  rental license. Without one,  you will have a difficult time pursuing any remedy.

Drew Sygit · Answer

@James Mc Ree most tenants aren't really serious about Payment Plans and will say anything to try to stay longer!

Here's what we require to do a Payment Plan:

1) Tenant MUST put in writing specific payment dates & amounts

2) Tenant MUST provide us acceptable proof of income to support Payment Plan

3) We put their proposed payments into a spreadsheet that includes their current past due balance and future rent payments
--- Many tenants only focus on their past due balance and forget about future payments!

4) Depending on when the spreadsheet shows they'll bring the balance current, we negotiate payment amounts or proceed.

5) If we proceed, they MUST sign a formal Payment Plan acknowledgement form that our attorney drew up.

6) They only have 7 days to do all this.

We know most tenants aren't serious about Payment Plans because less than 50% cooperate with all the above. So, it tells us who to continue evicting.

James Mc Ree · Answer

Conclusion: The tenants moved out as a result of my notice ending the lease at the end of the month and the 10-day pay or quit notice with indications that an eviction lawsuit is coming. So, that's a success. They left the place a mess, but I didn't see much intentional abuse so recovery shouldn't be that expensive.

Theresa Harris · Answer

it is worth a try, but if they don't pay, then follow through so the eviction is on their record, regardless if you ever see that money or not.

Tony Savage · Answer

If your tenants can't make their rent payment; there is no way they will abide to a payment plan.  They will agree to a payment but they won't make the payments.

Depending upon how much they owe you.  File the eviction if they are in rears for thousands of dollars.  If it's hundreds, just let them walk and tell them you won't file if you're out by the end of the month.

Mike Tamulevich · Answer

@James Mc Ree, prioritizing possession is always the best move in these situations. A payment plan sounds good in theory, but in practice, it often just delays the inevitable. If a tenant is already struggling to pay rent, a structured plan rarely changes their financial situation. The reality is that most landlords who offer payment plans end up chasing money for months, only to end up filing for eviction anyway.

You’re right that a judgment can be tough to collect, but an eviction on their record may give them more incentive to leave on better terms. If they voluntarily vacate and leave the unit in good shape, that’s often a win in itself. If you do go the payment plan route, make sure it's in writing, includes clear deadlines, and has consequences for missed payments. If they default, you’d likely have to take them to small claims court rather than pursue eviction, which can be another long and uncertain process.

In these situations, I always recommend focusing on getting the property back quickly and minimizing your financial losses. If you need a property management team to handle situations like this in the future, Marketplace Homes can help navigate tenant issues and prevent them before they become bigger problems.

James Mc Ree · Answer

@Theresa Harris If they breach the payment plan 3-6 months into it, can I still file an eviction lawsuit with them out of the property for that time? I was assuming it would be a breach of contract lawsuit for the payment plan.

Is a payment plan any better or different than an eviction judgement?

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