This post will give you TEN actionable steps you can take when you’re behind on bills.
We’ll walk you through some effective ways to do damage control when things are really tight.
- Negotiate lower payments on your mortgage.
- Communicate with service providers to prevent late charges,
- How to ask for deferred payments on car loans.
- What options you have for student loan payments.
- How to make some quick cash… and more.
*This post contains affiliate links. If you make a purchase we may be compensated at NO extra cost to you. Full disclaimer here.
Here’s What to Do When You’re Behind on Bills
We’ve all had those months… and they can be pretty scary. Getting notices in the mail, and receiving collector calls is one of the most helpless feelings in the world. I understand what it’s like to get the shut-off notice from the heating company.
Let’s get you moving in the right direction with some negotiating and budget fixing tips.
#1. Damage Control With Credit Cards
If you’re buried under credit card debt, do your best to stop using cards immediately if you can. I realize some people need them for groceries when the money is really tight…I’ve been there too.
If your credit is not yet affected by late payments, try applying for Discover Card’s Discover it cash back credit card. If you transfer your highest balance or two to their card, you’ll have zero interest to pay for 18 months.
If you don’t qualify for the Discover card, find a few other zero interest balance transfer cards and apply. Chances are, you’ll qualify for one of them. Don’t give up.
There’s a transfer fee, but you’ll save a bundle on future interest payments if your balances are high to begin with. The Discover card also comes with no yearly fee.
A call to your credit card company is a must. It’s better to communicate early on that you’re having a hard time with payments rather than being late and getting those huge late fee charges.
You may be able to negotiate a lower minimum payment for a while and/or rearrange your monthly payment date to fit your monthly budgeting needs.
Ultimately, you’ll want to transition away from credit cards to using only debit or cash until you’ve caught up on all debt and payments.
#2. Car Payment Deferment
If you have car payments and you’ve fallen behind, there is help available. You can talk with your lender about possibly deferring your payments (they’ll be added to the back end of your loan).
You may have to pay the interest portion of your monthly payment, but it will be much cheaper than the full monthly bill. If deferment isn’t allowed, be honest with the lender and ask for a temporary decrease in your payment while you try to catch up.
Extra Tip: If you own a high-demand car like a Honda or Toyota that holds its value on the used market, consider selling it for the top asking price of similar models on Craigslist or other used car platforms.
I sold a Toyota Highlander with over 200k miles for $5000 cash a couple years ago. You’d be surprised what you can make on popular makes and models.
If you don’t owe much on your loan, this tactic may be a good way to pay off the car. How great would it feel to let go of a monthly car payment?
If there’s leftover cash after the loan payoff, invest in an older car that runs well. If you’re short on the needed funds, consider doing a fundraiser or asking a family member for temporary help with the difference.
Public transportation, carpooling, rideshares, and temporarily sharing a car with your partner (if you have one) are other options that may work in a pinch.
#3. Making Your House Payment
Whether you rent or own your home, your biggest bill is the house payment. Don’t risk ruining your credit, being evicted, or foreclosing on your house; speak up and ask for help. If you have a landlord, call them and ask for temporary help.
If you own your home, call the mortgage company and explain your situation. Let them know you’re willing to do anything to keep your house and get current on payments. They may be able to offer any or all of the following options.
- Forbearance: A temporary agreement between you and the mortgage company to suspend or lower your monthly payments for an agreed-upon period of time. This is a good option for when you know you will miss payments and want to contact them ahead of time.
- Repayment Plan: This works when you’ve already missed some payments and need immediate help so you don’t lose your house or trash your credit. The lender adds a portion of your overdue amount to each monthly payment for a certain amount of months until you catch up.
- Loan Modification: This is a more permanent solution if your financial hardship is not short-term. Your lender may be able to help restructure the terms of your mortgage such as length of loan, interest rate, and monthly payment. If you don’t qualify for a refinance, this may be a great solution so you don’t lose your home.
- Refinance the Loan: If you aren’t behind on your payments yet, but you know a financial hardship is looming, look into refinancing your home. You do have to qualify with some credit checking, income reporting etc., but it could be the perfect answer to lowering your monthly payment.
#4. Help With Utility Bills
If you’ve been receiving notices about your utilities being shut off, or you’re a payment behind, call your utility company right away. Explain the temporary hardship, and ask if they offer a budget billing plan where you pay a flat fee each month to make the monthly bill more predictable.
You may also ask if they have a program to help low-income families. Our local utility company offers this.
Since most utility companies charge for what you use, asking for a flat-fee bill may help with monthly budgeting during a financial crisis. Winter and summer utilities can fluctuate quite a bit depending on the climate you’re in.
Flat-rate billing could spread the bill out more evenly and make those higher-usage months more affordable. Just be aware that at year’s end, you may owe some money if your usage went a bit over what the flat-rate billing was.
#5. Ask for lower cell and internet payments if you’re falling behind on bills
As a single mom, I got behind on bills and needed help a few times. The cell phone bill for me and four teens caused quite a bit of trouble. I ended up calling our carrier, explaining our situation, and asked about current promotions.
They switched me to their latest deal (which included more data). I saved at least $30 a month.
Now there are services like Ting, where you pay only for what you use! I highly recommend checking them out. Ting’s service is only $6 per line, and you’re charged for calls, texts, and data you’ve actually used each month. The average bill for their users is only $23 per month.
You can also ask for the latest promotional pricing from your internet service provider. I do this at least once a year and often get a special deal that’s lower than what I’m currently paying. Sometimes you’ll get bumped up to a higher speed AND pay less. Very cool.
For extra help in asking for lower rates, read my related post: Lower your bills just by asking.
#6. Get caught up on bills by cutting out what you don’t need
This is the most obvious action to take when you’re behind on bill payments and need to catch up. If you’re still using cable and expensive extra sports packages, consider an alternative for a while.
Sometimes you can do damage control before you actually fall behind on bills. If you know the budget is strained, act quickly to cut out all unnecessary expenses.
These are bills such as entertainment, excessive food costs, TV, and any extras that aren’t needed for daily living. In fact, you can save up to $500 on your monthly food costs with this one change, and possibly avoid falling behind on bills in the first place!
Save Big Money on TV
If you don’t have a gaming console with streaming capabilities, like a PS4, make a one-time purchase of a Roku box that connects to your TV. We’ve had Roku for two years and love it. Sure beats getting a monthly charge for TV. We only pay for Netflix now.
Roku allows you to access your Netflix, Hulu, and Amazon Prime accounts and offers hundreds of movie options and FREE channels of their own. Their channel store offers paid services like HBO, Spotify, and more.
Another option is to make a one-time purchase on an indoor long-range TV antenna for basic high definition channels. Click Here to find the best models on Amazon for a really affordable price.
Other Spending Cuts
Other temporary spending cuts could include manicures, pet grooming, take-out food, and expensive car washes — things you could do yourself. Avoid the mindset of feeling deprived, and be proud of every little bit that goes into getting you out of the hole.
If you eliminate unnecessary spending for a short time, you will find extra cash you desperately need for paying down your debt or getting current on other payments. The burden that’s lifted far outweighs the temporary inconvenience — I promise.
#7. Sell What You Don’t Need when you’re behind on bills
Do you have unused gift cards hanging around? Clothes with tags still on, or gaming consoles that are no longer in use? SELL THAT STUFF.
Decluttr will offer you a cash price for practically anything you have lying around…cell phones, games, books, technology etc. They even pay you the day after your items arrive!
#8. Help With Student Loan Payments
Student loan debt is crushing when you’re already behind on bills. Talk to your loan institution right away to inform them of your financial situation. If there’s been a job loss, many times they can adjust your payments based on what income, if any, you’re currently bringing in.
Chances are, when you took out your loan, you were placed in the “Standard Repayment Plan” category. Check your status right away if you can’t afford your payments, and ask for payment options based on your actual income.
You can also talk with your lender about a temporary deferment of payments until you get back on your feet. Most institutions would much rather help out than have you default on your loan.
- PAYE is a pay as you earn plan that’s worth applying for
- There is IBR which is also an Income-Based Repayment plan
- The ICR plan, Income-Contingent Repayment plan is another option
#9. Better Budgeting
Sticking to budgets can be tough. The word itself has a negative vibe to it, and can produce feelings of failure or deprivation. It doesn’t have to be that way.
Creating a “spending plan” puts a positive spin on budgeting. This simply means you’re in charge of your money and where it goes. You get to prioritize the direction of your hard-earned cash and feel more in control.
Necessary spending — as mentioned earlier — includes various loans, credit card debt, house payments, and utilities. You don’t have as much control over where that cash flows each month. But you can follow some of the tips and find temporary relief while you catch up financially.
A spending plan especially helps with directing money [or not directing money] towards expenses you can control. These are things like gas, groceries, eating out, kids’ sports and activities etc.
Write down every monthly expenditure that fluctuates or isn’t absolutely necessary, and look closely at the total. Are you surprised by what you see? Is your grocery spending higher than you thought?
Believe it or not, you may be spending as much as $500 too much on food every month!
A Cash Envelope System That Doesn’t Require Cash
Cash envelope systems are great for tracking your spending. Many people hate them because it’s a pain in the butt to carry cash all the time.
I highly recommend the Cashless Cash Envelope system. It helps track your spending and doesn’t require cash. How cool is that!?
The Cashless Cash Envelope system, created by Tracie Fobes over at Penny Pinchin’ Mom, is the perfect fit for those of us who want to keep it simple and pay with debit cards. For only $2.99, you get these amazing templates that cover every spending category you can think of.
Click HERE to get the Cash Envelope Printables — they will make your money tracking fun and efficient!
Save on gas and insurance
Find the cheapest local gas prices with free apps! GEICO has a free app that points you to the cheapest gas. You don’t even need to have car insurance with them. GasBuddy is another popular free app to use for saving at the gas pump.
Save on gas by combining errands with regular work or appointment days when you can. Try to arrange carpools for kids’ activities and trips to and from school.
**Check your car insurance!
If you haven’t compared your car insurance with the competitors lately, you could be spending way too much. Call GEICO, Safeco, MetroMile , (which is pay-per-mile) or the company you currently use for other types of insurance. Bundled deals can save you a fortune!
Another quick insurance tip is to re-evaluate whether you need that expensive collision coverage. If you have an older car — or have a teenager who does — it might not be worth the expense to cover for collision. Ask your agent to see how much you could save without it.
Involve Your Kids
Evaluate what you spend on expensive kids’ activities. This one’s very hard –we don’t want to “deprive” our kids of things we think they need and enjoy.
But think of what you’re modeling for them when you continue to spend $300 per month on hockey, or $175 per month on cheerleading lessons when you’re already up to your eyeballs in debt.
Have a family discussion about how EVERYONE can pitch in to help while you’re in financial crisis. You can emphasize that it is temporary, but it’s a great lesson for your children’s future money management practices.
How to catch up on bills when you are behind
Okay, now we’re getting into the depths of being behind on your bills. Your overdue envelopes are stacking up and causing panic. This is a tough place to be.
Let’s talk about the options when you’re actively behind on bills and need help making those payments.
It can be very tempting to think, “I’m falling behind on bills and need a loan.” Catching up on bills when you’re behind should focus as much as possible on earning some quick extra money AND freezing all unnecessary spending.
Getting a personal loan to pay bills when you’re behind will only put you deeper into a hole. It seems like immediate relief in the short term, but it’s disastrous overall. Using loans to pay bills puts you further in debt.
The biggest problem with getting a loan when you’re behind on bill payments is the extremely high interest. You’ll be paying many time what that original debt was worth. The only exception is getting a temporary loan from a family member.
#10. Hustle hard to earn extra cash when you’re behind on bills
There are hundreds of ways to earn extra cash in your spare time with paid projects or by renting out your stuff.
Make Money with Your House and Car
Airbnb is now famous for its disruption of the hotel industry, for good reason. If you need some fast cash, consider renting out a spare room or finished basement on occasion. This pays particularly well if you live in a high tourism area or near a large city where people travel often for business.
Along those same lines, consider listing your car with Turo. It’s the same concept as Airbnb, but with car rentals. I absolutely love Turo and have rented with them the last three trips I’ve taken.
If you register your car with Turo, it’s listed on the website where prospective renters browse for good deals. You’re in complete control of when and how often you rent it out, and you get to set the price point.
Your car is covered for up to one million dollars in damages, and Turo offers roadside assistance with its service.
If your car’s sitting in the driveway this weekend, why not put it to work for you?
**If you own a pickup truck, you can make bank by signing on with GoShare to help deliver or move large items for people who don’t own trucks. Depending on the size of your truck, you can earn between $45 and $60+ an hour! You choose the hours you want to work.
Fast Cash Ideas
Most people have heard of Fiverr, the platform that offers services of every kind for very affordable prices. What you may not know is you can also earn money by listing a service on Fiverr.
If you can offer virtual assistant skills, proofreading, graphic design, logo design, helping people with WordPress…or a million other things, then get set up on Fiverr and make a bit of extra cash. You could earn $50 today!
With all of the grocery and food delivery services out there now, it’s not hard to find a quick side job that’s flexible and works around your schedule.
Try Instacart for shopping and delivering groceries form your local stores. You can choose a higher rate of pay by doing the shopping for an order, plus dropping it off to the customer. Or you can just choose to deliver an order.
Instacart also has pay bumps where you get a higher rate if you shop and deliver at peak busy times. And they also pay more for Costco runs! Why not make some quick extra cash doing something you already do each week!
There’s also Amazon Flex. You can make $18-$25 per hour delivering for Amazon. You can build your own schedule, and there are opportunities for deliveries every day of the week.
It is my sincere hope that you benefit from some of these tips when you’re behind on your bills. Keep your chin up, and take baby steps. Each small step in the right direction will make you feel better and more in control of your money.
Do you have helpful money tips for those months when the budget is tight? Share them in the comments.
Please PIN and share!