What to Do When You Can’t Pay Your Bills

Life has a way of throwing us curveballs. It could be an illness, sudden job loss, or an unexpected expense. You don’t have enough money to pay your bills, and you’re not sure what to do. Although people rarely talk about this kind of situation, it’s something many of us have experienced.

If you’re struggling to cover your bills right now, take a breath. There are steps you could take to find relief and regain stability. 

Just by searching for what to do, you’re taking an important first step. Here’s a simple checklist for what you could do when you can’t pay your bills:

• Tighten up your budget

• Prioritize your survival expenses

• Look for assistance programs

• Call creditors and ask for help

• Figure out what financial changes you can make

Tighten Up Your Budget

Start by reviewing your budget. If you don’t have a budget yet, now is probably a good time to make one. Go over your recent banking and credit card statements to look at all the places you spend money, and look for places you can trim the fat.

You might have bills you can get rid of entirely, such as streaming services or meals at restaurants. Even with expenses you can’t completely cut, there could be ways to spend less. For example, maybe you could reduce grocery spending by searching for sales and coupons before you shop.

When you can’t pay your bills, every dollar makes a difference. If you get strict with your budget, you may have less of a shortfall. Remember, these changes could be temporary until you get back on your feet. 

Prioritize Your Survival Expenses

In tough times, your basic needs come first. Prioritize the things you need to survive, meaning:

• Food

• Housing

• Utilities

• Transportation

If you have the money, pay those expenses before any others. Other bills, such as credit card and loan payments, may need to take a backseat for now. They aren’t crucial to your survival like having food to eat and a place to live.

Look for Assistance Programs

People going through financial hardships can often access some help through national, state, and local programs. For instance, if you’ve lost your job, first check if you qualify for unemployment benefits. 

Every state has an unemployment insurance program. You can find the eligibility requirements and apply for unemployment online. Visit the website for your state’s employment department for more information.

Here are a few more types of assistance programs to look into:

• You can find food assistance through SNAP (food stamps), WIC (for women and children), and food banks with Feeding America.

• Explore Temporary Assistance for Needy Families (TANF), which helps families in need pay for food, housing, home energy, and childcare.

• Emergency housing programs and rental assistance are available through most parts of the country by calling 211, a service offered by the United Way.

Ask Creditors for Help

When money is tight, you may not be able to cover credit card bills and loan payments. That doesn’t mean ignoring these bills entirely. Your creditors could be willing to work with you, especially if you’re proactive and let them know what’s going on.

Your monthly billing statements should have phone numbers for your credit card issuers and lenders. Contact all your creditors, explain your situation, and ask about your options. Some companies have forbearance programs and could temporarily pause your payments or offer you a lower payment amount.

If you haven’t yet missed a payment, reach out to the creditor right away. The best time to ask for help is before you miss any payments, not after. But you could still get assistance even if your account is delinquent, so don’t let that stop you from trying.

Figure Out What Financial Changes You Can Make

You’re taking steps to get by while in a difficult situation. Next, think about changes you can make going forward to have more financial stability.

If your bills are just too much for you to afford, the solution could be a change in your lifestyle. You may need to sell your car and get something cheaper or move to a more affordable area. You could also look for opportunities to earn more money.

Another common reason people can’t pay their bills is because of expensive debt. If you’re struggling to keep up with your debt payments, here are a couple of strategies to consider: 

• A debt consolidation loan could mean fewer monthly payments, and possibly a lower payment amount. 

• Working with a debt relief company that helps you settle your debt could be the right strategy if you have too much debt to manage 

• Filing Chapter 7 bankruptcy could get rid of your unsecured debts if you don't have a lot of assets.

Remember that your situation doesn't have to be forever. If you’re ready to make changes, you could get your finances back to a point where you’re able to pay your bills, save some money, and get on the path to a better financial future.