Embarrassment is probably the first thing you will when you cannot pay your bills. And when you are embarrassed, it is easy to give in to the temptation of hiding and running away.
Unfortunately, that is the worst decision you can ever make. This kind of financial problem is something that you need to face and deal with head-on.
Here are some tips on what to do when paying your bills goes out of your reach:
Ditch the Non-essentials
Check your list of expenses and get those that you don’t need for survival. You have to let go of paid memberships, additional phone features, newspaper subscriptions, satellite or cable, and streaming services until you find solid footing with your finances.
Make Your Bills Your Top Priority
If your money is still not enough for paying your bills, you have to decide on the bills you will pay now and those that need to wait. Review your list of monthly expenses then prioritize those items that are crucial for your existence. You must include things such as your mortgage or rent, insurance, and utilities. Your next priority should be your secured debts such as your home equity loans, car loans, and other debts attached with collateral.
Your least priorities are your unsecured debts. These include things such as personal loans, credit card debts, and the majority of service-related bills. After you have prioritized your bills, list down the bills that you won’t pay right away.
Look for Ways to Make Money
Skipped payments and late payments can take their toll on your credit score and might make you lose your car or home. Do your best to earn the amount of money you need for covering that gap in your budget. Start a side hustle, take on a second job, sell some items, and do pretty much anything in your power so you can have your bills paid on time. There are now many ways to make money fast and you need to exhaust all your options before deciding not to pay your bills at all.
Renegotiate Your Medical Bills and Student Loans
If you are still paying off your medical bills or student loans, you might negotiate new terms for repayment to free up some money. You can place federal student loans in deferment or forbearance if you are really in a tight spot. This will let you stop making payments in the meantime or reduce your payments.
It is much easier to renegotiate medical bills. You just need to get in touch with the accounting office, discuss the amount that you can afford to pay, and most of the time, they will be willing to work around that.
Talk to Your Creditors
After doing everything you can to lessen the damage, it is now time for you to inform your creditors of what is happening. Call them before the due date of your bill and explain your current situation. This call wouldn’t be a happy one but it can help you stay out of trouble.