An eviction diversion program is a court-connected process that lets a landlord and tenant resolve unpaid rent through mediation and, where available, rental assistance, instead of fighting it out at trial. A neutral mediator runs the conversation, both sides usually participate for free, and a successful outcome can keep an eviction judgment off the tenant’s record while getting the landlord paid.1National Center for State Courts. Getting Started – Eviction Diversion
When the Program Steps In
Diversion can happen at three points in a dispute. Pre-filing programs resolve things before the landlord ever files in court, which spares both sides the filing fee and the stigma of a case on the tenant’s record. Post-filing programs intervene after a case has been filed but before a judge rules, pairing both parties with mediation, legal aid, and social service referrals. Post-judgment programs are rarer and focus on helping tenants plan an orderly move when staying isn’t realistic.1National Center for State Courts. Getting Started – Eviction Diversion
Courts, legal aid organizations, and local government agencies typically run these programs together.2U.S. Department of the Treasury. Eviction Diversion In some jurisdictions participation is voluntary. In others, the court requires it before a case can move to trial.
Who Qualifies
Rules vary from one jurisdiction to the next, but most programs share a few baseline requirements. The dispute has to involve a residential rental, not a commercial lease or vacation rental. Many programs set tenant income limits based on a percentage of the local Area Median Income, and some cap the total past-due balance that qualifies, on the theory that extremely large debts can’t realistically be mediated.
Programs commonly require that the delinquency come from financial hardship, not lease violations like property damage or criminal activity on the premises. Some jurisdictions also limit eligibility by the size of the landlord’s portfolio, sometimes excluding small owner-occupied buildings. Your local court clerk’s office or legal aid organization can tell you exactly who qualifies in your area.
Documents to Bring
Preparation shapes what the mediator can actually do for you.
If you’re the landlord, bring the lease (plus any amendments or renewals) and a detailed rent ledger showing every payment received and every payment missed, with dates. Without that ledger, the conversation stalls on basic facts.
If you’re the tenant, gather proof of current household income from the prior few months — recent pay stubs, benefit award letters, or similar. Bring any written communication about the late rent: demand letters, notices to quit, text messages. And bring documentation of the hardship behind the missed payments, such as medical bills or a layoff notice, since that context often shapes the repayment plan the mediator proposes.
Application forms are usually on the local court’s website or at the clerk’s office. When you fill them out, break the total owed into base rent, late fees, and utility arrears separately. Rental assistance funds, where available, may cover rent but not the other charges.
What Happens During the Session
A neutral mediator or program coordinator leads the meeting. It opens with the confidentiality rules and ground rules, then each side explains what’s owed, why payments fell behind, and what resolution might work. The mediator keeps things focused on financial realities rather than personal grievances. Sessions usually run about an hour; complex ones take longer.
If you reach an agreement, it goes in writing during or shortly after the session. If you don’t, the case returns to the regular court docket and heads toward a hearing. Mediation gives up none of your legal rights. It only gives both sides a chance to avoid the cost and uncertainty of trial.
Settlement Options
Most agreements fall into one of two camps: the tenant stays, or the tenant leaves on negotiated terms. A handful of provisions show up again and again.
Pay and Stay
A pay-and-stay provision lets the tenant remain in the unit on a specific repayment schedule. These plans usually start with an upfront lump sum (whatever the tenant can manage immediately) and continue as monthly installments on top of regular rent until the arrears are cleared. The installment amount depends on what the tenant can realistically afford, and a good mediator will push back on plans that look likely to fail within two months.
Negotiated Move-Out
When staying isn’t workable, the parties can agree on a soft move-out. The tenant gets additional time to find new housing, often 30 to 60 days, and in exchange the landlord may waive part of the outstanding debt. Many of these agreements also require the landlord to provide a neutral reference to future housing providers, confirming only the dates of residency and the final balance rather than characterizing the tenant’s payment history.
Conditional Dismissal
Most settlements include a conditional dismissal clause. The court closes the file once the tenant fulfills the repayment plan or moves out as scheduled, but the landlord can re-open the case if the terms are breached. Getting this clause in writing is one of the most valuable things a diversion program can produce. It’s the difference between an eviction on your record and a clean slate.
Signing and Filing the Agreement
The landlord (or an authorized representative) and every tenant named on the lease must sign. The signed document then goes to the court clerk or program administrator and becomes part of the official record. Most courts accept electronic filing, and electronic signatures carry the same legal weight as handwritten ones under federal law.3Office of the Law Revision Counsel. 15 USC 7001 – General Rule of Validity
Once the agreement is filed, the judge usually issues a stay of proceedings, pausing the eviction timeline while the terms are carried out. Both parties receive a copy of the court order confirming the agreement is binding and enforceable. Keep that copy. If either side later disputes what was agreed, the filed order is what controls.
If Mediation Fails
Not every mediation succeeds. If the parties can’t agree, the case returns to the regular court calendar and the judge or jury hears it. Nothing said during mediation can be used against either side in the subsequent proceeding; the confidentiality rules exist specifically so people can negotiate without worrying about handing the other side ammunition.
A failed session isn’t a total loss. Both parties now understand the other’s position, which sometimes produces a settlement before the court date. And any tenant who connected with legal aid during the diversion process keeps that representation going forward.
If the Agreement Is Breached
If a tenant stops paying or otherwise violates the settlement, the landlord can return to court to enforce it. In some jurisdictions that means filing a motion in the existing case; in others, a new action citing the breach. Either way the process moves faster than a standard eviction because the underlying facts are already established.
Judges take breaches seriously. A tenant who agreed to specific terms and then didn’t follow through gets far less sympathy than one appearing for the first time. If you’re a tenant and realize you can’t meet the schedule, contact the program coordinator or landlord right away. Many agreements include a modification provision for changed circumstances, and asking for a change is far better than silence followed by a motion to enforce.
Why Diversion Matters for Your Rental Record
An eviction filing can follow you for years, even if the case is later dismissed. Under the Fair Credit Reporting Act, civil suits and judgments can appear on tenant screening reports for up to seven years from the date of filing, or until the statute of limitations expires, whichever is longer.4Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports That seven-year clock starts when the case is filed, not when it ends.5Consumer Financial Protection Bureau. How Long Can Information Like Eviction Actions and Lawsuits Stay on My Tenant Screening Record
That’s a big part of why diversion matters. A case resolved through a pre-filing program creates no court record at all. A post-filing resolution with a conditional dismissal shows the dismissal next to the filing, which reads very differently to a future landlord than a default judgment. Roughly a dozen states now allow certain eviction records to be sealed or expunged, though the rules and eligibility differ.
Taxes on Forgiven Rent
If a landlord waives part of what you owe, the IRS generally treats the forgiven amount as taxable income. The landlord may send you a Form 1099-C reporting the canceled debt, and you have to include that amount on your return for the year of the forgiveness.6Internal Revenue Service. Topic No. 431, Canceled Debt – Is It Taxable or Not
There are exceptions. If you were insolvent when the debt was forgiven, meaning your total debts exceeded the fair market value of everything you owned, you can exclude some or all of the forgiven amount by filing IRS Form 982. Debt discharged in bankruptcy is also excluded. Given the financial strain most tenants in diversion are already facing, the insolvency exception applies more often than people realize. A tax professional or legal aid attorney can tell you whether you qualify.6Internal Revenue Service. Topic No. 431, Canceled Debt – Is It Taxable or Not
Getting Legal Help and Rental Assistance
There’s no federal constitutional right to a lawyer in eviction cases. Most tenants go through the process unrepresented while most landlords have counsel, and that imbalance shapes outcomes: tenants miss defenses, agree to unfavorable terms, or simply don’t show up.
A growing number of jurisdictions are responding with “right to counsel” laws that guarantee free representation to tenants facing eviction. As of early 2025, more than two dozen cities, counties, and states have adopted some version. Eligibility is often income-based, and coverage varies. Where these programs exist, represented tenants are significantly more likely to keep their homes or negotiate favorable settlements. Even in areas without a formal right to counsel, legal aid organizations frequently participate in diversion programs and can represent qualifying tenants at no cost.2U.S. Department of the Treasury. Eviction Diversion Contacting your local legal aid office before the first court date is one of the highest-value steps a tenant can take.
Many diversion programs also connect tenants directly with rental assistance funds that can cover part or all of the balance. The federal Emergency Rental Assistance Program completed its final distribution period in September 2025.7U.S. Department of the Treasury. Emergency Rental Assistance Program State and local programs continue to operate in many areas, funded through local government budgets, housing trust funds, and federal block grants. Your court’s diversion coordinator, a legal aid attorney, or the Consumer Financial Protection Bureau’s housing assistance portal can point you to what’s currently available where you live. When assistance can cover the arrears, the settlement often becomes straightforward: the landlord gets paid in full, the tenant stays housed, and the case is dismissed.