How to Pay Bills When You Can’t Pay Your Bills

First, protect the essentials — shelter, food, heat, lights, transportation and what you need to be able to work.
Mar 15, 2016

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When the money you’ve got just won’t go far enough, you need to know how to strategically pay some bills — and minimize the fallout from not paying them all. Here’s how to put a plan together.

First, protect the essentials

These include shelter, food, heat, lights, transportation and whatever else you need to be able to work (such as child care and phone service). What’s not essential? Everything else. Credit scores can recover. For now, focus on the basics.

You may need to move if you can’t afford where you’re living. There’s an exception to this rule, however. If you can’t afford your mortgage payment, you may want to stay put. The foreclosure process typically takes several months, which means you could stay in your current home for free while you try to fix the rest of your financial life.

Next, do some triage on your bills

Use the guide above to see how long you’ve got on each type of bill before consequences begin. Virtually any skipped payment hurts you somehow. But there’s a big difference between missing a credit card payment and missing one for, say, child support.

You’ll also find resources, where applicable, that might help you find some breathing room.

Be prepared for calls

While tossing a few bucks to your credit card issuers or collection agencies may temporarily get them off your back, such payments are ultimately pointless if you wind up erasing your debts in bankruptcy or entering a debt management plan. We suggest you visit both a nonprofit credit counselor and a bankruptcy attorney sooner rather than later. Consultations are typically free.

Visit the National Foundation for Credit Counseling’s locator website to find a counselor near you and learn how to find the right bankruptcy attorney.

If you are sued, it’s important to show up in court — otherwise a default judgment will be entered against you that can lead to wage garnishment and raids on your bank account. Many states allow you to be arrested for failing to respond to a court order to appear about a debt.

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