4 Things to Do If You Can't Pay Your Bills

According to Pew Research Center, around a quarter of Americans can’t pay all of their monthly bills, or can only make partial payments.

It's a tough spot to be in. There are debt relief options that might reduce what you owe if debt is part of the situation. However, these solutions can take time. 

If you find yourself in this situation, there are four things you can do right away. They can help you deal with the immediate crisis of not having enough money to pay the bills, and give you breathing room to explore long-term solutions.

1. Reach Out to Creditors 

Start by contacting your creditors. Many lenders and credit card providers are willing to work with customers experiencing hardship. Some lenders will pause your payments during periods of hardship. For example, credit card forbearance could apply in some circumstances. Some lenders may also reduce your interest rate, extend your repayment period, reduce fees, or otherwise make payments more affordable.

When you reach out, be ready to provide information about your finances, including whether your difficulty paying the bills is likely to be permanent or temporary. This can shape which options are available.

2. Look Into a Side Hustle

If your current income isn't stretching far enough, there are lots of side hustle options. They include driving for a rideshare company, pet sitting or dog walking, babysitting, tutoring, freelance writing, or selling arts and crafts.

Think about your strengths and weaknesses, and look for a side hustle you can do regularly—and preferably one that you will enjoy. If you can find a niche no one is filling, you might eventually consider turning your side hustle into a full-time business. 

3. Sell Unneeded Items

If you have an immediate need for help paying your bills, look for items you don't need and could sell. Maybe you have outdoor equipment you don't use very often, or toys your kids have outgrown. 

Finding things to sell could help you to avoid late payments or missed payments that damage your credit score. You could even host a garage sale or virtual garage sale, or see if your friends and neighbors have things you could help them sell for a percentage of the sales price.  

4. Prioritize Based on Consequences of Nonpayment 

If you can't find a solution that allows you to pay everything, prioritize what to pay first. To do this, focus on the importance of the debt, and the consequences of not paying. For example, not paying your mortgage could lead to foreclosure, which could be devastating. Losing your car could also lead to serious problems.  Paying utility bills to keep your family warm and comfortable is always a top priority, too.

Once you have covered these absolute essentials, prioritize paying child support because of your obligation to your kids. It’s also a debt that doesn't go away, and carries the potential for severe penalties for nonpayment. 

Next, consider income tax debts, since the penalties can be very serious. 

Unsecured debts and credit cards are usually lower priorities. Though it’s important to make minimum payments if possible, it’s more important to cover your essential bills first. You typically don't lose your house if you don't pay unsecured debts and, in most cases, don't face legal action. 

You may also be able to look into settling unsecured debts for less. Learn how Freedom Debt Relief can help by exploring how Freedom Debt Relief works and reading Freedom's FAQs. If you can get these debts off your plate over time, that may be a good long-term solution to help free up more money to cover other bills.