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What To Do If You Can’t Pay Your Bills: 10 Easy Tips

What To Do If You Can’t Pay Your Bills: 10 Easy Tips
Diana Star Mar 29, 2019
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Even in today’s continually deteriorating economy, paying bills is a norm especially because you can’t head over to the next month without doing so.

What happens when you have a heap of debt notices and statements from different companies, but you can’t pay them off?

Of course, the feeling of shame and failure is inevitable – especially if you have a family that looks up to you.

Rather than ignoring your financial issues, weigh all the options available to you. Also, try not to fall prey to get-rich-quick scams that may land you into even deeper debt.

By following these tips, you’ll be able to pay your bills without having to damage your credit score in any way.

1. Budget Your Left Over Income

After sorting out your basic monthly expenses, your leftover income can easily dig you out of your ‘inescapable’ bill situation. The process may be arduous and slow, but with diligence and hard work, it can have a successful ending.

If you’ve never budgeted before, now would be the best time to do so. Better budgeting helps you make better financial decisions.

Additionally, it highlights the importance of setting aside something substantial every month specifically for debt every month. Managing expenses in your head is never the best way to plan for your money.

Seeing the numbers in print allows you to see the magnitude of your needs. Begin by drafting a budget that incorporates all your expenses and income. Discover new ways of cutting your costs and spending, then adjust your budget accordingly.

Once you have your budget in place, you can use it as a guideline to spend your income wisely. Give utmost priority to expenses and debts.

List the essentials such as child support, utility bills, mortgage, etc., as well as the less important ones like loans from friends and family or charge cards from department stores.

2. Give More Priority to Secured Loans

Taking care of secured debts first is principally more significant than settling unsecured ones. It’s, therefore, important to fully understand the differences between the two. So, what’s the difference?

When a debt is classified as ‘secured’, a piece of property (collateral) is used in guaranteeing the repayment of a debt.

Secured debts could be in the form of home equity lines of credit, mortgages, and car loans. ‘Unsecured’ debts, on the other hand, are not tied to a specific piece of property.

Failure to settling any unsecured debts may lead to the creditor suing you and getting a court judgement. Your property or wages can be taken from you to cater for the expenses. Typical examples of credit card debt are credit card debt and medical bills.

With precise knowledge of the two, you’ll be better off keeping your home from foreclosure by updating your mortgage.

3. Understand the Type of Bills and Settle the More Dire Ones

As seen above, certain types of debt are more serious than others. The type(s) of debt you have, more often than not, dictate what options you have to clear them and the strategies you can use to do so.

The following are some of the most common household bills and how you can pay each one of them:


A lot of homeowners are facing foreclosure whilst trying to keep up with mortgage payments. If you’re a struggling homeowner, you can find relief from state programs such as the Hardest Hit Fund program.

A number of servicers and lenders help you steer clear of foreclosure with various options. They basically include repayment plans and loan modifications forbearance agreements. Borrowers having trouble keeping up with payments can significantly benefit from these options.

Medical bills

Many individual medical providers are ready to work with individuals who cannot pay their medical bills. Keeping your medical bills to yourself only makes paying them off even harder. Managing out-of-the-roof medical bills is only possible once you seek financial assistance.

Student loans

If you’re struggling to pay off your student loan, the four most suitable ways to pay them off for good includes refinancing the loans, consolidating them, making a lump sum payment and increasing your monthly loan payment.

If doing any of these doesn’t help, there are a number of government programs that can help. They can provide financial relief including offering you cancellation options.

4. Have a Chat with Your Creditors

There are times when we just don’t have the means to cater for each of our bills. There are those that we give more priority to and then focus less important ones will follow – this doesn’t mean that we ignore them.

When you’ve done everything you can to put the damage to a minimum, why not let your creditors understand the situation on the ground?

Before you start paying your bills, there’s always a partnership between the creditors and the borrower. Things happen that are totally out of our control.

The sooner you make your issues known to your creditors, the sooner you can escape the harsh consequences. Here are a few steps to face the tough prospect of talking to your creditors:

Have an up-to-date statement on hand

This simple act alone can show your commitment to clear your growing bills. The statement should include the full balance you owe your creditor.

Before calling them for a meet-up, first, check their website. Most of them prefer to have a list of items you would want to discuss when they receive your call.

Examine Your Financial Situation

Ensure you take some time to assess the magnitude of your bills before you call. Think about how much you can set aside to pay your debt every month.

Also, consider how soon you can start setting off the monthly minimum payment. Weigh your options of whether to ask them for deferred payments or reduced fees.

Keep it short and straight to the point

Long stories only make your predicament worse. Creditors will think that you’re making up something to avoid clearing the debt you owe. Discuss the specifics.

Explain yourself in the sincerest way possible, focusing on the facts of your status quo. If possible, state the reason(s) why you were laid off from your monthly earnings.

Keep your cool

When you take the bold step of calling them but they seem rather insensitive to your situation, don’t lose it. It’s easy to throw courtesy to the wind and give them a piece of your mind.

Remember, this ‘insensitive’ individual is the bridge between the collections agency and yourself. Focus on the facts, remain polite and always stay calm.

 Follow up the conversation

After your discussion with the creditors, give them a reason to believe that they didn’t waste their time listening to you.

That’s why it’s a good idea to have what you discussed in print or writing. Include all forms of supporting documentation such as proof of unemployment and how much you can raise each month to clear the debt.

Most creditors will look into your situation and agree to offer reduced and deferred payments, extended due dates or even a late fee waiver. These can help you greatly to save your credit score and eventually get your finances back on track.

5. Look for Ways to Earn or Increase Your Income

Late or skipped payments could severely damage your credit score. You could end up losing your car or even your home because of this.

Raising the money required to pay your bills will require you to up your game and push your limits.

Making extra money comes with two significant perks: you get to live within your means and second, no more relying on your credit cards.

Best of all, you get to pay your bills and live the rest of your life without looking over your shoulder for creditors.

It’s one thing to be unable to pay your bills because your hands are tied, and it’s another to have the means but do nothing about it. If you’re earning insufficient income or no income at all, there are several online ways to raise money to cater for your bills.

  • Sign up with trusted online survey platforms and fill out online surveys.
  • Try your hand at freelancing writing.
  • If you’re an expert website designer, brands and businesses can pay you good money for your skills.
  • Proficient Instagram, Twitter or Facebook users can make a living off promoting businesses on social media.
  • Post some useful or social videos on YouTube and make money from allowing ads on your videos.
  • Clear out your home and sell useless stuff on eBay. For valuable items, seek out an independent evaluator instead.
  • Get paid to test out new websites with User Testing.
  • Love taking photographs? Sell your stock photos to businesses and individuals on sites like iStockPhoto.

With these options and lots more others, you can raise a substantial amount every month to pay your bills with little time and effort.

Most of these can be done from practically anywhere – your workplace, your living room, etc. As much as possible, try to spend your time in devising new ways to make money to cover your ever-growing budget gap.

6. Beware of Debt Management and Debt Settlement Company Scams

Most companies promote debt negotiation and debt management plans as the sole solutions to all your financial woes.

Companies which offer debt management plans work hand-in-hand with the creditor and consumer to come up with suitable payment plans.

The consumer will be expected to deposit a certain amount the debt management company’s account every month. The funds will then be used to pay the creditors.

Debt settlement agencies chip in and offer to convince creditors to discount the consumer’s debt. Companies that provide these kinds of services are known to:

  • Provide poor financial advice.
  • Never discuss alternative ways to cater for your bills.
  • Make false promises.
  • Charge outrageous fees.
  • Collect your money and make a run for it.

In 2008, debt settlement and debt management scams were at the top of numerous state attorney general offices’ consumer complaints. Therefore, however desperate you may be, never link yourself to scam companies like these.

Take a step back and review the significant pros and cons of seeking assistance from debt management and debt settlement companies.

That’s the only way to save yourself from potential fraud and costly schemes that have the potential of making your financial situation a whole lot worse.

7. Look for Ways to Curb Excessive Spending

Don’t think twice about it. Maybe your inability to clear your bills lies in how you spend your monthly income.

Begin by reviewing your month-month bank statements to see what you spend your money on every month.

Go through each of the listed purchases, and question yourself whether to include them in this month’s budget or not.

Figure out how you’re going to eliminate all unnecessary expenditures. The money you’ll be left with will be channeled into paying your bills.

Bear in mind that you’re not doing this to test your spending limits; you want to save up a significant amount of money to pay your bills.

If that’s not a worthy cause, I don’t know what is. To improve your finances, it’s going to take a lot more than jotting your plans down on paper.

When you begin saving, you may be overwhelmed by the flood of temptations that will come your way. If you signed up for email notifications from deal sites and retailers, it’s best if you cancel those subscriptions.

Rule out the idea that they save you money. You stand to save a lot more by being totally unaware of those seemingly incredible bargains.

For now, make all the necessary temporary sacrifices. Learn the various ways you can effortlessly save money while making more money in the process.

When you’re debt-free, you can always decide on whether to add unnecessary expenses or carry on with your newly-found frugal lifestyle.

8. Seek the Services of a Nonprofit Financial Counselor

If you feel like the pressures of paying your bills are weighing you down a great deal, get back on track with the help of a nonprofit counselor.

Every year, millions of people drowning in debt turn to nonprofit counseling for that much-needed assistance.

It’s time you joined the bandwagon of debt-ridden people bold enough to admit they can’t do it on their own.

However, the key here will be to get honest, trustworthy assistance from a renowned nonprofit counselor. The following are brief descriptions of support to expect from a financial counselor:

 Assistance in creating a budget/spending plan

A budget or spending plan is a significant part of reducing or clearing your debt. The counselor will provide you with options of living within your means whilst being able to pay your bills.

They will help you have a clearer focus on where your money is going and help you to cut back on spending to save more.

Free counseling session

Usually, professional counselors will have a sit-down with you for up to an hour and a half. The whole time will be used in reviewing your entire debt situation and knowing where you stand financially.

All this will be done at no cost at all. Even though there’s an upfront fee, it will be very affordable (less than $100).

The counselor will begin with a friendly and holistic approach in a bid to understand your predicament better.

Also, you’ll be given room to speak freely and honestly so that he/she can give you the most appropriate coaching advice.

Work with you on both forms of debt

As you know by now, there are two major forms of debt: secured and unsecured. Good counselors will carefully review both of these to bring some stability to your domestic financial life.

They will focus on keeping your lights on, making sure you don’t skip meals and most importantly, having a roof above your head. When that’s out of the way, he/she will advise you on how best to pay your credit card bills.

Having a closer look at your expenditures

Your counselor will focus on your monthly earnings and your expenditures. They will then look at your bills, how much it totals to, your interest rate, and finally, your over-the-limit/late fees.

After discussing all of these with you, they will be able to evaluate whether or not they believe you’re in a position to pay your bills with their assistance.

Aside from this, they will see whether to recommend a debt management plan (DMP) or consider bankruptcy.

9. Consider Debt Consolidation

Balancing household expenses against credit payments can really weigh you down. If you’re juggling one creditor to sort out another, consolidating your debt may be a worthwhile strategy for you.

Debt consolidation is basically putting together a number of outstanding bills into one collective monthly payment. Often, this may involve a loan to kick-start the process.

Few consolidation approaches even offer debt relief in the form of debt pardon. In general, there are five debt consolidation options to choose from:

  1. Debt management plan
  2. Savings or retirement accounts
  3. Balance transfer credit cards
  4. Personal loans
  5. Home equity loans

What You Need For Debt Consolidation

Learn more about these consolidation alternatives and opt for the one that works best for you. The following are some of the requirements your bank will require to make you liable for debt consolidation:

  • A printed copy of your monthly budget
  • Proof of a steady source of income
  • Collateral such as a house, car, etc., or the presence of a co-signor. Agreeing to sign collateral puts your home and property in jeopardy.
  • Proof of payment of interest. This will assure the bank that you’re fully capable of meeting your consolidated payments.

Depending on your preferred debt consolidation option, you may be able to receive full interest relief or a cut in your interest rate.

Generally, if you’re dealing with $10,000 or higher in debt and you’re working yourself too hard to keep up with your monthly expenses, debt consolidation can lighten the load to your advantage.

10. If Possible, Steer Clear from Taking Out Loans

The worst thing you can do when you’re debt-ridden is falling prey to the loan trap. Tempting as it sounds, borrowing loans can easily land you into deeper financial problems.

Unforeseen medical costs, job loss, and a whole load of other reasons send you in an economic tailspin. The next thing you know, you’re drowning in massive credit card debt.

In any case, if you decide to do so, you’ll find yourself applying for another loan in a few months or years to come. If you’re still keen on solving your financial woes via taking out loans, here are some viable options:

Personal loan

These types of loans aren’t secured, so there’s no asset risk aside from checking your account. Use a personal loan to reduce the interest on your bills significantly.

 Home equity loan  

If you’re a homeowner and you have some equity, tap into it and get a loan equal to your debt. Doing so will most likely convert your high-interest debt to a lower interest rate.

Balance transfer

When you’re qualified for a balance transfer loan, you can get a 0% balance transfer credit card. All your outstanding balances will be transferred into your credit card, making it easier to pay each of them at once.

Considering we’ve already covered nine legitimate options to choose from, there’s no reason to borrow loans. Doing this will generally make your bills a little painful to bear.

This could be owed to the fact that you’ve lengthened your time to clear it or lowered the interest rate. It’s understandable to take a loan when life leaves you no choice. If you decide to borrow a loan, you should be prepared for the consequences that lie ahead if you fail to repay it.

Bottom Line

In the midst of despair, keep in mind that many have trodden the path you’re in right now. Even the most successful businesspersons have been debt-ridden at some point.

Though it may seem like your financial walls are caving in, the options mentioned in this post are just a drop in the ocean.

But the ones dicussed above could be all you need  to bail yorself out of your frustrating predicament. It’s also important to keep in  mind  that getting out of debt isn’t a walk.  It needs patience, consistency, and hard work.

Running away from your money problems isn’t an instant fix to your financial woes. Go ahead and apply the above-mentioned tips. It will all be worth your while.

Diana Star

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