![]() However, this doesn’t necessarily mean it’s the best way to approach your debt. Yes, it is possible that this approach can have you free of debt-eventually. Then they’ll put the greatest amount of money toward the credit card that has the largest balance on it. They do this by looking at the amount of money they owe on each credit card. Many people fall into the trap of putting money toward their credit cards proportionally. You can also talk to our credit coaches today for help. Ask if your creditors can lower your minimum payment, or consider credit counseling to consolidate your debt payments. Don’t be shy or ashamed to talk to all of your creditors about your situation ask for deferments or extensions to give yourself more time to pay. When financial hardship strikes, you have to get organized right away and look for ways to cut spending. Move this priority up only if they actually sue you and win a judgment in court. No matter what bill collectors tell you, don’t forego paying higher-priority bills to pay a debt collector. The debt avalanche method) and try to get them paid off first. Within this category, prioritize your credit cards with the highest rates (a.k.a. Note : Pay higher interest rate debts first. Stick with paying the bills that have immediate consequences for non-payment. These creditors won’t be able to repossess your home or car, and even if they sue it will take some time before they can extract payment. This includes credit cards, medical bills, and other types of unsecured debt. A lower-priority bill, to be sure, cancel unnecessary premium features until your financial situation changes. Make sure you aren’t paying for landline features (unlisted phone number, call waiting) you don’t need or use (as the majority of consumers use their cell phone as their primary phone), and audit your bill for hidden charges. ![]() Many WiFi and cable carriers are bundled with a landline phone carrier, reducing your plan to a lower level creates savings. Ask about applying for a deferment until your financial situation improves. Because student loans are backed by the government, they have more power to act against you than typical bill collectors. You can request a payment plan yourself with the IRS. Another expense that can have serious consequences if you fail to pay. It’s impossible to earn a living from a jail cell. ![]() It also preserves your ability to earn a living, because if you don’t pay, you could be arrested. This is an obligation no one should overlook, period. Your phone bill may also qualify here if you rely on it for work. This includes your car payment if your vehicle is essential for you to get to work. Any bill that preserves your ability to earn a living should be a high priority. The Homeowners Assistance Fund (HAF) helps homeowners impacted by COVID-19 to catch up on their housing expenses, including property taxes, the program varies by state, to learn please visit or schedule an appointment with one of our HUD-certified housing counselors. Anything that can cause you to lose your home should be addressed before your other bills. Likewise, any home equity loans you have should be high-priority. Any bills related to your home, like insurance, HOA dues, taxes, and the like should be paid to ensure you keep your home. There are many assistance programs available to help you with your monthly utility bills, be proactive and don’t wait till your bill is late, ask your utility company now what programs are available in your area. Your second priority should be your utilities, specifically your water bill, and electricity/gas. If your situation is so bad that you can’t afford your rent or mortgage, talk to a HUD-certified housing counselor right away to understand what options may be available to you. Your first bill paid every month should be the one that keeps a roof over your head. If you’re not sure you’re going to be able to pay all of your bills, stick with beans and ramen noodles until you get your situation under control. ![]() That doesn’t mean dining out, of course weathering hard financial times means literally tightening your belt. We’re talking specifically about paying bills here, but naturally, you will need to have enough money set aside to keep everyone in the family fed. While we all strive to pay all of our bills promptly, sometimes we are forced to choose which payment to make with limited funds on hand. “I Can’t Pay My Bills!” – Prioritizing Your Monthly Billsĭuring hard economic times and when money is tight, unforeseen circumstances may prevent you from paying your bills on time. ![]()
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