What to Do When You Can’t Pay Your Bills

With the higher than normal unemployment rate, and even higher underemployment rate, many people find themselves in a situation where they can’t pay their bills. If you are one of those people, here are a few strategies that might help you.

Prioritize Your Bills

Think about what is important for your survival. You need a place to live. You need food. You need a way to heat your house in the winter.

When you go to pay your bills, pay those that will help you survive first. Pay your rent or mortgage, the electric bill, and hold out some money for food. Make sure you have transportation to look for a job or get to work, if you have a job. That might mean money for transportation, or it might mean gas money for your car.

At the bottom of the list should be credit card payments and other bills that you don’t need to stay alive. Of course it would be best if you could pay something toward all your bills, but if there’s no money, there’s no money. Just don’t ignore your creditors. Read on for more steps you need to take.

Cut Your Budget to the Bare Bones

After you prioritize, you need to cut your budget to the bare bones, so you can free up more money to pay your bills. Can you cancel the cable? Cancel either your landline or your cell phone? What about selling your car with the payments, and using public transportation?

If you’re unemployed or low income, look into food stamps to help with the grocery bill. If you’re pregnant, nursing, or have young children, look into WIC. Research energy assistance in your area. Defer your student loans. There are options out there for low income people, but you have to look for them.

Increase Your Income Any Way You Can

Look for ways to increase your income, even if you can’t find an ideal job. Do you have books or furniture you could sell? What about your second car? Do you really need it?

When my husband was unemployed, he took a part-time night janitorial job. It wasn’t glamorous, but between that job and his unemployment benefits, the bills got paid.

Other options for making a little money might be newspaper delivery, pizza delivery, babysitting, or even shoveling snow.

Talk to Your Creditors

Now is not the time to bury your head in the sand. Be honest with your creditors. It’s possible that they won’t help you at all. If they don’t, you won’t be any worse off than you are right now. But there’s also the possibility they will work with you.

Ask your credit card company to lower your APR rate. Ask your doctor if you can make a payment plan. Explain your situation and what you’re doing to put yourself in a better position to pay your bills in the near future.

Companies are more likely to work with you if you are up front, honest, and polite. Once you’re late and your bill gets sent to collections, you’re much less likely to get help.

Debt Collection: Know Your Rights

If your bills have gone to collections, you have rights. A debt collector cannot contact you before 8 a.m. or after 9 p.m., unless you agree to it. They also cannot contact you at work, unless you OK it.

Debt collectors are not allowed to harass you with threats or obscene language, make false statements, or threaten to take your property (unless it can be done legally).

In addition, debt collectors need to send you a validation notice, explaining how much you owe and to whom, within 5 days of contacting you.

For a full list of your rights, see the FTA website.

If after you’ve done all these things, you still can’t pay your bills, it may be time to talk to someone at the National Foundation for Credit Counseling to see what your options are.

It’s never fun when you can’t pay your bills, but with a little legwork and perseverance, you can make your bills manageable while you look for work.


By , on Jun 17, 2013
Lynnae McCoy I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.


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  1. They should also contact the state and local charities. There are programs that help for people whose utilities are about to be shut off or who are about to be homeless. Don’t go by denomination, either. Those groups will help you whether or not you’re Catholic, Jewish, etc.

  2. Erik:

    Prioritizing your bills is extremely important. Don’t pay the credit card bill before you pay the utility bill. Make sure your family’s basic needs are met first, then pay the rest of the bills as you can. If you truly don’t have the money, you can’t pay your debts. Make a plan to increase your income or sell some stuff to build up a lump sum for catching up on your bills when your income does go up.

  3. Look into community resources, too. For example in my area there is a program that will pay one heating bill a year and another that will cover one water bill. Many of us donate to these programs when we pay our utility bills to help others and to ensure the program is there if we ever need it. While you may not need to use them during a tight month, it can relieve some stress knowing these programs are available if push comes to shove.

  4. Kate:

    Great article. I am lucky that I still have a job that pays me enough to meet all of my bills. However, I was just looking at ways to budget better because I am sick of living paycheck to paycheck and I don’t want to touch any of the money I am putting into savings.

    Also, I really wish I had thought of some of these tactics when I was unemployed and nervous about how I was going to pay the bills. I think one of the best things you can do is to call your credit card company and see what type of deal they could work out with you.

    Two years ago, I set out to get rid of all my credit card debt. I called and most of the companies were happy to work with me on better interest rates to get the debt paid. It never hurts to ask!

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