How to Deal When You Can't Pay Your Bills

Making ends meet is hard enough in today's current economic climate even when you have a steady job. But when unemployment due to job loss or illness strikes, it can make it that much more difficult to manage. With a little courage, it's possible to make it through these difficult times.

Instructions

1

Take a deep breath. Now is not the time to panic, no matter how overwhelming your situation may seem. In order to get through this difficult time, you will need a clear head, patience, courage, and focus.

2

First, take a look at your available assets. Make a list of your savings accounts, investment accounts, 401k plans, IRAs, insurance policies, any properties or cars that you own, and anything else you have that might be of some value. Hopefully you have a sizable emergency fund in place but if not, you have to exhaust every possibility to replace your income until you have money coming in again.

3

Now, make a list of every single bill that you have. This means your mortgage, cable, cell phones, utilities, credit cards, student loans, tuition payments, child support, etc. Next, you will want to prioritize this list to get a general idea of what should be paid first each month.

4

Food, shelter, utilities, and transportation should be at the top of your list. In this age of increasing foreclosures, the decision of whether or not to maintain your mortgage payments is going to vary from one situation to the next. It will ultimately depend on the payment amount, the value of the home, income and savings, and what other types of debt you are carrying.

5

If you have child support obligations or tax debt, these payments will be next on the list. If you are carrying student loan debt, you can try to seek a hardship deferral or a forbearance. Student loan lenders are usually very willing to help you out and new government guidelines regarding repayment are making it even easier for those with low incomes to defer their payments.

6

Now it's time to look at the non-essentials. This means cable TV, cellphones, Internet, and unsecured debt. Many people will often continue paying their credit card bills even when they're behind on their mortgage simply because the debt collectors are more aggressive. If it comes down to a choice of keeping a roof over your head or missing a credit card payment, this should be a no-brainer. There are consequences to not paying your credit card debt, but they can be dealt with are far less serious than losing your house.

7

Don't be afraid to ask for help. Contact your creditors and explain your situation. See if there are any hardship plans available. Write hardship letters and send them to each of your creditors explaining the details of your situation and your intent to repay your debt. If you are unable to make your payments, it may at least make the collection process a little less painful.

8

Take advantage of any aid that is available to you. Government programs such as food stamps and Medicaid are there for a reason. If you are at the point where you are struggling to pay your most basic bills or you can't afford food, there are places you can go for help. It may hurt your pride temporarily but in a time of crisis, you should not be afraid to ask for help if you need it. When your situation improves and it will, you can then give back to others in need.

9

Look at the big picture and consider all your options. No one wants to consider foreclosure or bankruptcy but sometimes that becomes the reality. Be realistic about your situation so that you can be realistic about your options and make the best choice for you and your family going forward.