If you’ve always been responsible with your finances, being unable to pay a bill might send you into a state of panic. You may fear damaging your credit score or receiving calls from your creditors.
Unfortunately, this scenario is all too common. We live in tough economic times, and between the rising cost of living and people losing jobs, it has become harder to make ends meet. Even if you’re doing okay today, things can quickly change. While a change in your finances may eliminate your “play” money, being able to keep up with your main expenses might be enough to keep you calm.
Then again, maybe you’re having difficulty paying one or more of your main bills. Don’t panic. Here are three smart moves when you can’t pay a bill.
1. Prioritize. If there isn’t enough cash to go around, pay your bills in order of importance. Understandably, the idea of paying a bill late may leave a bad taste in your mouth, especially if you’re a stickler for timeliness. However, you can’t make money appear from the sky, and paying some of your bills on time is better than paying none. For example, if you have to choose between your electric bill and a credit card bill, pay your utilities first. Yes, you’ll get hit with a late fee from your creditor. But as long as you pay your credit card before it’s 30 days past due, the lateness will not appear on your credit report.
2. Notify your creditors. If you can’t pay your bills, sometimes, the solution is as simple as notifying your creditors. Believe it or not, but your creditors may be willing to assist when you’re in a financial jam. Asking your creditors for a payment extension or taking a skip payment option can remove your immediate stress, thus allowing time to get your finances on track. For this method to work, don’t wait until you’re past due to notify your creditors. The sooner you speak with them, the better. Plus, if you wait until after your payment is due to ask for help, you may be charged a late fee.
3. Consider title loans. Maybe your financial problem is temporary and you need an immediate short-term loan to pay your rent or mortgage. In this case, you might benefit from title loans. Of course, you’ll need to own your car outright to qualify. How does this work? Simply apply for a loan, and your car title acts as collateral. The amount you receive varies depending on the value of your automobile. The repayment terms on a title loan varies and since these are short-term loans with higher interest rates, only apply for financing if you’re able to repay the loan within two to four weeks.
There are ways to overcome financial troubles. Whether you’ve recently lost a job, mismanaged your funds or experienced an unexpected expense, knowing how to proceed can help you get through a money crisis and avoid a bad relationship with your creditors.