What to Do When You Can't Afford to Pay Your Bills


Many people suffer from financial challenges after losing a job, incurring medical bills or managing their money poorly. Without enough money to pay their bills, these individuals run the risk of destroying their credit or losing their home. Individuals in this situation can take several steps to ease the pressure.

Determine How Much You Have To Pay Bills

Before paying any bills, determine how much money you have available. Look at your paycheck stub to see what your net pay equals. Remember that your net pay refers to the amount of money you take home after all deductions are taken out of your check. These deductions include income taxes, FICA taxes, 401(K) contributions or child support payments. The amount of money left equals the amount of money you can use to pay bills.

Prioritize Your Bills

Determine which bills are most important and which creditors allow the most flexibility with your payments. Mortgage or rent payments provide shelter for yourself and your family and should be a higher priority when funds are limited. Medical providers and credit card companies often wait several months before taking legal action, while auto lenders can take legal action immediately. Student loans offer the greatest flexibility, working with borrowers to reduce payments or skip payments for a period of time. Consider which bills are necessary to maintain your ability to work, such as child care. Losing your job because you can’t pay your child care bill only makes the situation worse.

Contact Creditors

Contact your creditors to explain the situation and see if any offer hardship assistance. Many mortgage companies offer programs to help homeowners suffering from temporary financial hardships. Credit card companies may be willing to reduce interest rates. Most student loan companies offer reduced payment plans, deferrals or forbearances to assist borrowers with financial challenges.

Research Assistance Programs

Contact your community resource organizations. Local communities often offer assistance programs to defray the cost of living expenses, such as rent or groceries. Utility companies may offer assistance programs to qualified customers, especially during winter months when lack of power threatens safety. Look into alternative child care arrangements. Some child care centers charge a sliding fee based on income.

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