What to do right now when you can’t pay the bills

When you can’t pay your bills, you feel embarrassed. Because you’re embarrassed about the situation, you make poor decisions about dealing with it. Instead of taking steps to correct the situation. You take steps to hide the situation. 

That’s the worst thing you can do. 

Whatever you’re going through right now does not define you. 

Being late on your bills, unable to pay your bills or facing bankruptcy does not describe who you are as a person. 

Whatever got you in this situation will not define the rest of your life. You will pull out of this and get this under control. Stop thinking about yourself as a victim and start thinking of yourself as the person who will change their life and never be in this situation again. 

What you need to fix this is an action plan. Follow these steps in order and as quickly as you can do them. Aim to have these steps done within a week. Don’t put them off or feel guilty about them. It is what it is. What’s done is in the past and you’re working to make things better. 

1. Calculate how much extra money you will need to have in order to be able to pay that bill on time. 

Grab a piece of paper and write down all of the income that you know will be coming in for the rest of the month. Then write down your expenses including a projected amount for things like groceries and other necessities. 

2. Calculate when you would be able to catch up on that bill. 

Be realistic.  It is so tempting to say we can clear that next week, or in a few days without really being certain.  

Let’s be honest that is little more than wishful thinking.

When you get clear on your budget you can commit to a payment plan with confidence.  It’s only then that things will start to turn around for you.

3.Tell your spouse the situation. 

Apologise if it’s your fault and tell them that you’re taking it seriously and will have it fixed as quickly as possible. You need them on your side. It does no good for them to be buying lunches out every day if you can’t pay your electric bill. You need them to know the situation, so you can work together to fix it. 

Accept responsibility and move on. If you’re the only one doing the finances right now, schedule in weekly budget meetings so that everyone is on the same page. You need to be doing this together. 

4. Determine which bill will be paid late. 

Pay the bills of things that are essential first (mortgage or rent, council tax, water, gas, electric).
Call or email the bill company you are unable to pay. 

Most companies will have a freephone number and teams that are trained to help.

Let them know that you won’t be able to make the payment.

5. Asking for help. 

Be polite and explain that you are taking this matter extremely seriously. Ask if there is anything they can think of that would help you. Giving you a 15-day grace period, waiving a late fee, cutting the interest, setting up a payment plan, etc.

PLEASE don’t skip this step. I know it’s hard to make that call. Remember not being able to pay a bill does not define you.   

6. Look for ways to cut costs quickly. 

Try out a spending freeze, look for ways to reduce your grocery budget quickly, cancel cable for a few months or cancel any unnecessary subscriptions. 

Look through the food cupboards and freezer. Take the opportunity to use up supplies rather than mindlessly buying more food.

Look for fast ways to make money (legally of course!) Sell things in your home on craigslist, eBay or Facebook groups. I made £45 in an hour this afternoon by cleaning out a cupboard and doing just that. 

7. Follow up with the company until you can get the bill paid off. 

In many situations, a late payment wouldn’t be reported to credit reference agencies until the payment is over 30 days late. 

Your goal should be to get that payment in before it’s 30 days late. 

While that doesn’t guarantee that it won’t be reported, it makes your chances of it not being reported much better.

8. Multiple missed payments, totally drowning?

Already more than 30 days late?  Don’t think for a minute that these steps won’t work for you.  

Communicating with the Companies that you are late making payments too is a huge step to getting back on track.   

Remember to be realistic and not over-promise.  Stay calm. Explain the situation fully.  If you can only afford to pay 50% for the next few months.  Tell them that.

9. Think longer term. What can you do to make sure this never happens again? 

Get a working budget. 

If you tackle those steps as quickly as you can and start working on making better decisions going forward, then you can avoid these situations in the future. 

Creating and sticking to a budget puts you in control, helps you get a handle on everything, and provides a lifeline. Your budget gives you a clear picture of where you are and a realistic place to start from. It takes some practice, just like any life skill, but I promise you can do it!

10. Organisations that can help and offer advice

Check here for information of organisations in the UK that offer free advice and help dealing with debt. 

Steer well clear of Companies that offer to reduce your monthly payments with your creditors for a fee. 

There is lots of free help available, don’t let embarrassment stop you making a difference today.

There are two ways that you can handle something like this. You will either hide it and ignore it and continue down this path, or you will meet it head on with fierce grace and let this be the moment that you decide you will never be in this situation again. A situation like this can either break you or build you. 

Let this build you. 

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