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Can’t Pay Your Bills? Get Help Now 

Can’t Pay Your Bills? Get Help Now

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Erik Martin
UpdatedDec 25, 2022
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    8 min read
Key Takeaways:
  • Learn to spot debt relief scams.
  • Reach out to lenders and creditors when you can’t pay your bills.
  • Financial help is available via credit counseling, government assistance, charity, and debt relief.

When debt piles up and your earnings aren’t sufficient, it’s natural to ask yourself a question: If I can’t pay my bills, what am I going to do?

Don’t panic. There are strategies you can adopt to help you keep your spending in check, negotiate with your creditors, tackle your debt, and get financial relief. By pursuing best practices and staying financially disciplined, you can solve your debt problem and sleep better at night.

Four tips to help pay your bills

Dreading that trip to the mailbox every day? Got a stack of bills that are piling up and causing serious concern? You’re not alone. 

Fortunately, there are tried-and-true methods to climbing out of debt and having more control over your finances, including the following four strategies:

  • Tip #1: Check your spending and prioritize your bills
  • Tip #2: Talk to your lenders and creditors.
  • Tip #3: Tackle your debt
  • Tip #4: Seek out financial relief.

Let’s talk about how each of these works.

Check your spending – prioritize your bills

If you don’t yet track your spending, start now. 

When you are aware of your transactions you can more easily minimize discretionary purchases. At the same time, knowing how much money you have and where it’s going can help you prioritize essentials such as food, housing expenses, and utility costs. 

It’s easy to track your spending with a budgeting app like Mint, PocketGuard, or You Need a Budget.

“Look at all your spending categories and see where you can make cuts. Food and entertainment are generally the budget categories with the most wiggle room,” says Amy Maliga, a financial educator with Take Charge America.

Prioritize which bills to repay first, including those that assess high interest rates or penalties for late payment, as well as debts that, when unpaid, can get you sent to collections and harm your credit.

Talk to your lenders and creditors

Instead of ignoring a bill and waiting for the fallout, consider meeting the challenge head-on and talking directly with the lender or creditor that issued the bill to negotiate a more favorable repayment.

“Contact your lenders or service providers immediately if you cannot pay your bills. There may be options available such as skipping a payment, making a partial payment, or enrolling in temporary hardship programs,” Maliga recommends. “The key is to call the lender or creditor right away. The longer you wait, the fewer options you will have available.”

Can’t pay your mortgage or rent?

Evictions are expensive, and it’s in everyone’s best interest to get you caught up on your housing payments.

“Landlords and lenders are eager to find solutions when you cannot make payments because they are not interested in going through the lengthy eviction process if they don’t need to,” says Dennis Shirshikov, a strategist for Awning.com and a professor of economics and finance at City University of New York. “Most mortgage lenders can give you a two- to three-month grace period, and many landlords will agree to forgive some of your past due rent to get you back on track.”

Just be aware that, while many landlords and lenders will collaborate with renters and homeowners to keep them in their homes by agreeing to mortgage adjustments or taking partial payments in the short term, “losing your home is one of the biggest possible consequences of failing to pay these bills,” Melanie Hanson of research firm EDI Refinance cautions.

Can’t pay your utility bills?

The situation isn't hopeless if you have difficulty paying for gas, electric, water, or other utility bills.

“Utility companies have special payment plans and government subsidies for people who cannot afford to make payments. Reach out early and get access to these programs, as it can be much harder once you start missing your payments,” suggests Shirshikov.

Particularly during winter, many local and state governments have laws against turning off key utilities in homes, especially gas/heat, for folks who can’t pay their bills.

“This is another case where it’s worthwhile to contact the utility company to let them know about your hardship and potentially make partial payments in good faith,” adds Hanson.

Can’t pay your medical bills?

Medical bills and expenses can accumulate quickly. Your first step if you can’t pay is to contact the healthcare provider and request an itemized bill.

“Especially for large and complex hospital stays, this could be a good step toward getting the bill reduced,” Hanson notes. “Another key tactic here should be to take a payment plan from the provider if they offer one. Most of them charge no interest as long as you keep up with your payments.”

Be sure the provider has your insurance information, avoid paying for a provider or hospital charge until your insurance has been billed and paid its fair share, inquire about financial assistance programs available through the hospital or provider, and consider contacting the Patient Advocate Foundation for assistance at www.patientadvocate.org.

Shirshikov points out that you can usually dispute or request a settlement of debts with healthcare providers. “If you are struggling to pay, there are also medical debt forgiveness programs available to you.”

Can’t pay your credit cards?

Credit card bills can be especially problematic, as the high interest rates typically charged can snowball your outstanding balance quickly. But there are things you can do.

“If you call your credit card company and let them know you are experiencing hardship, they can freeze your payments for three months,” advises Shirshikov.

Maliga recommends adopting one of two credit card repayment strategies. With the snowball method, you pay off your smallest credit card debt first as quickly as you can; after that debt is paid, take the funds you are making toward that payment and apply them to the next smallest outstanding debt, repeating this process until all of your credit card debt is paid off.

“Or, adopt the avalanche method, wherein you pay off the highest interest debt first,” she explains.

Alternatively, you may want to consider taking out a debt consolidation loan that can bundle several credit card debts into one loan that charges a lower interest rate.

You can apply many of these aforementioned tactics to any debt, not just credit card debt. For example, the avalanche or snowball method can pay off your medical and utility bill debts more quickly. And a debt consolidation loan doesn’t apply merely to credit card debt.

Tackle your debt and avoid debt scams

Do your own research to identify legitimate debt relief companies. Unscrupulous companies and bad actors want to bilk you out of your money at a time when they feel you are more desperate and vulnerable.

According to the Federal Trade Commission, debt relief service scammers target consumers with significant credit card debt with false promises and up front fees. A debt relief company can help you, but they can’t negotiate a settlement that you can’t negotiate on your own. Also, up front fees are illegal. 

Auto loan modification scams also falsely promise that they can reduce consumers' monthly car loan or lease payments to help them avoid repossession. Credit repair scams also frequently target financially distressed consumers who are having credit problems. These operations lure consumers to purchase their services by falsely claiming that they will remove negative information from consumers' credit reports even if that information is accurate.

To prevent getting scammed by these and other entities, you have to do your own research. Check their rating and reputation via the Better Business Bureau. Inquire with your state’s attorney general office to learn if any complaints have been filed. You can find your attorney general here.

“You’re also likely going to need extra money to tackle your debt, so getting odd jobs, selling things you own, or otherwise making some extra cash can go a long way to accomplishing this goal,” Shirshikov adds.

Additionally, while you’re attempting to dig out of a debt hole, put measures in place that will help you avoid taking on additional debt. Freeze your credit to make it less convenient to apply for new credit, loans, or accounts. Lock your credit card, and don’t carry it with you.

Get financial relief

In addition to reaching out to your creditors and lenders and explaining your financial hardship, it’s smart to ponder financial relief options that may also improve your situation. Consider investigating the following strategies.

Credit counseling

Working with a nonprofit credit counseling service, including a nonprofit organization accredited by the National Foundation for Credit Counseling, can help you learn long term strategies for managing your credit and finances.

“You will work with a certified counselor to review all your income, expenses, and debts, plan a budget, and receive recommendations for effective debt payoff strategies,” says Maliga. “One of the options may be a debt management plan. On these plans, consumers make one payment per month to the credit counseling agency, which then pays the client’s creditors.”

Before enrolling in any service or plan, beware of anything that promises instant results – such as immediate improvement in your credit score, she warns.

Government and charity

You may qualify for particular government assistance programs or subsidies in your local area or state, as well as charitable organizations offering help and resources. Ask your creditor or lender about the availability of these programs and your eligibility.

Debt relief programs

Debt relief, also known as debt settlement, involves a creditor agreeing to less than the entire amount owed as full payment. Debt relief can also prevent debt collection agencies from hounding you for the unpaid amount and suing you for what you owe. With debt settlement, you start a savings account and make a monthly deposit. When your debt settlement company determines that your account is eligible for a lump-sum offer, it negotiates with your creditor on your behalf to accept a lower amount.

Frequently Asked Questions

How does online bill payment work?

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Enrolling in an online bill payment program can be a great way to automatically schedule your bill payments, so that you can avoid missing payment deadlines and incurring interest and penalty charges.

“Nearly all bills can be paid online these days, and it’s a simple, effective way to make sure you pay your bills on time, every time. This allows creditors to debit your bank account or credit card for a specific amount on the same day every month, which can be the payment due date or another date you specify,” explains Maliga.

How do I pay my utility bills?

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If you are encountering financial challenges paying your utility bills, contact your utility provider and explain your hardship. You may be allowed to make good faith payments or partial payments that can prevent the utility from being turned off. Also inquire if the provider offers budget billing programs, in which your monthly bill is based on an average usage rate rather than actual usage every month. It’s worth asking whether your income qualifies you for a rate discount, too.

How do I deal with medical bills in collections?

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Once medical debt goes to collections, it can start to negatively impact your credit score. Maliga recommends contacting the collection agency to learn your options. If you can make a lump sum payment, you may be able to negotiate a lower total amount. Otherwise, you should be able to make payment arrangements. If you are not able to pay it all, learn if you are eligible to enroll in your state’s Medicaid program, which may pay for previously incurred charges