Prioritizing When You Can’t Pay the Bills

by Miranda Marquit · 8 comments

There are times when things just aren’t working out financially. You might have had a big financial setback, such as a lost job, or a drastic cut in hours. In some cases, a large and unexpected expense (such as a hospital stay) can cause undue financial pressure.

In such cases, it is difficult to pay all your bills. Indeed, you might not be able to make all of your payments. When this happens, it’s important to carefully consider your financial situation, and what you owe. You also need to decide which bills must be paid — and which you can let slide.

What Will You Lose If You Don’t Pay?

Your first step is to figure out what you want to maintain. If you want to remain in your current living arrangement, then you need to make your rent payments or mortgage payments. If you still owe on your car, and don’t want it repossessed, you must remain up to date on your auto loan payments.

Consider what you will lose if you don’t pay. If you have reliable public transportation, and you think that you will still be able to find a new job, or make it to work, you might let the car payment slide. If you want to avoid losing a home or a car, or something else that is acting as collateral on a loan, you have to make paying on those loans.

There are other types of bills that might not be as important to you. Unsecured loans, such as credit card loans, might be low on the priority list, since there aren’t items attached to them. Plus, you do have rights as a debtor that can help you reduce the contact from creditors. However, anytime you stop paying bills, you run the risk of lowering your credit score. Your credit being destroyed may or may not be important to you though, since you probably have higher priorities at the moment.

Getting Help

If you are struggling to pay your bills, you can get help. There are loan deferment programs for student loans, as well as other types of loans. If you contact your mortgage lender, or your credit card issuers, you might be able to work out a different payment plan, or get a deferment. A deferment allows you time to get back on your feet, suspending debt payments. However, you will still accumulate interest, and you will have to repay the skipped payments later.

Those who are struggling to pay their heating bills can usually find community help through heat assistance programs. There are a number of charities, churches, and programs that can provide you with resources to help you free up money. However, to qualify for any of this type of help, you generally have to prove that you are having trouble meeting your bills.

Prioritizing your bills is an important part of figuring out which items need to be paid as soon as possible. Consider which items are essential, and stay in contact with your creditors so that they know what your plans are, and can see that you are in earnest about repaying.

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{ read the comments below or add one }

  • Arminius Aurelius says:

    In debt? Would you like to hear the secret for increasing you weekly income by 50%? Easy… You work 5 days a week, 8 hours a day right? Just get another part time job 4 hours a day, for 5 days a week. What you say, I work hard enough.

    Well if I as the owner of 5 restaurants could work 6 days a week, 12 hours a day, that is 72 hours a week in order to succeed [ and succeed I did ], why can’t you work an extra 20 hours a week? I bought bankrupt restaurants and built them up, did this for 30 out of the 34 years I was in business.

  • spectrekitty says:

    I think the most important thing is to stay in touch with your creditors. Is it fun? Absolutely not. Is it easy? Yes and no. But in the ’80s, I purchased a business that was deeply in debt, and the only thing that made it possible for us to get necessary supplies was to stay in touch with the creditors, and work out a way to pay for current materials, plus pay an old invoice. I was surprised at how cooperative the creditors were, and I learned an invaluable lesson.

  • Slinky says:

    I grew up watching my mom make these kind of decisions. The first thing to consider is how temporary or permanent the situation is. You can fudge things a lot more if its just a rough couple of months. If the situation isn’t likely to be resolved that quickly you need to make more drastic changes, like getting rid of the car loan. Also, at least where I live, they can’t turn off your heat in the winter even if you don’t pay.

  • Thad P says:

    Not paying a bill should be a last resort. Unfortunately it isn’t for a lot of people. Excellent post on how to prioritize.

  • Not being able to pay your bills is very stressful. One thing that’s a terrible idea when you’re having trouble paying the bills: Payday loans. The ridiculous APRs they charge will dig you deep into debt very fast and should be avoided at almost all cost. Pick up the phone and negotiate with your creditors before getting a payday loan!

  • ImpulseSave says:

    I sure hope I’m never in the position to have to chose between these things! It can be tough to keep a clear head in these types of situations. But as you said: look at it logically and figure out a plan. It is best to figure out the steps forward than make more foolish decisions and get in greater trouble.

  • Jean says:

    Good post. When times get really tough, it can be a tough act to juggle on where to cut corners, especially when it comes to bills. I like the way you have suggested one go about it based on their particular situations.

    -Jean

  • Emily Hunter says:

    There were many times when I’ve made the choice between food and gas, usually picking gas to get the car to the work for food. I agree with the no nonsense idea of looking at it objectively. 🙂

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