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What Can I Do If I Can’t Pay My Bills?

How to Handle Bills, Debt and Financial Struggles

Everyone has bills to pay each month. Unfortunately, sometimes it becomes very difficult to manage these payments and pay every bill on time. There are many reasons why.

In some situations, a person could lose their job or receive less income for some other reason. That can make it very tough to meet financial obligations. In other instances, a person may have overspent and now can’t afford to make the payments they need to. Another common scenario is a person who has a large amount of debt and who struggles with paying it off due to high interest payments.

For whatever reason, paying bills can sometimes be difficult for many of us at various times.

However, there are options available if you’re struggling to pay your bills. Here are some tips.

Figure Out Why

As mentioned, there are a lot of different reasons why someone may have trouble paying their bills. Before you can solve your problem, you need to figure out why you’re having issues in the first place.

Have you been having difficulty paying bills for a long time, or is this a relatively new problem? If it’s a recent issue, what has changed? Did the interest rates on your debt increase (such as your mortgage rate)? When this happens, you’ll be expected to pay more each month, which can make it tougher to handle payments. Another issue could be that you’ve started spending more than you can afford. To figure out if this is the case, look at your credit card and bank statements. Add up all your expenses, then compare this to how much you’ve earned. If you’re spending more than you’re making, it’s time to adjust your budget so everything balances.

Work Out a Budget

Having a budget is important. No matter how much you earn or how much you spend, you should have one. A budget should list all of your spending, broken down into categories. Some categories your budget might have are groceries, entertainment, transportation, rent/mortgage payments, etc. Each person’s budget will be different and unique to them.

If you’re having trouble paying your bills, you’ll need to adjust your budget so you have enough money to spend on both necessities and debt repayment. This will likely mean cutting back on some less vital expenses. Look at where you spend your money and find places where you can cut back. One option could be to start cooking at home instead of eating out, for instance. You may also wish to adjust or cut your cable package, phone plan, subscription streaming services, and various other expenses to make ends meet.

Contact your Creditors

When you’re having a tough time paying your bills, your first instinct may be to avoid your creditors. However, in some instances, it could make sense to give them a call. For example, if you’ve always been able to make your credit card payments, but you recently lost your job and now you’re having trouble, call the credit card company and let them know. Explain your situation clearly and ask if there is anything they can do. While your creditors have no obligation to work with you, if you are honest and explain yourself, they might be willing to reduce your interest rate or give you more time to pay.

How to Deal with Creditors

If you’re not able to pay your bills when they become due, creditors or collection agencies may start calling. This can be very stressful. In these situations, it’s important to stay calm. Listen to what they’re saying, take notes, and make sure to get any payment arrangements in writing.

It’s also crucial to verify the information that the collection agent has. Make sure they tell you who they are, why they are calling, how much they believe you owe, and who the money is owed to. If these facts don’t add up to your own records, let them know that an error has been made.

Always know that you have rights. If the calls start getting harassing or threatening, you can hang up and you might consider reporting them to the government agency that handles collection agency complaints in your province or territory.

Speak to a Professional

When bills start getting overwhelming, it can feel very helpless. The reality is that, no matter your situation, there are options out there. Speaking with a Licensed Insolvency Trustee can help you understand your options and make wise financial choices.