What to do when you can't pay your bills

Of course, you will want to avoid this situation in the future by taking steps to increase your income. But that takes time. In the short term, here is what you should be thinking about.

1. Protect your essentials. If you have to choose what bills to pay, start by paying for the things that you absolutely need: housing and food. You can include utilities and transportation in this category too. Eventually you could look to lower these costs by changing where you live, purchasing cheaper food and perhaps selling your car and relying on public transportation if possible.
2. Estimate how long before consequences of not paying begin. For your other bills, you can start estimating how long it will be before the services get cut off or late fees start adding up. You may be able to skip a month of your phone and internet bills, for example. Some credit cards have late payment forgiveness so you can miss a month and still not trigger an interest rate increase. If an account does charge a late fee, find out how much it is. It could be a nominal fee, in which case you can delay payment and not be hit with too large of a penalty.
3. Where can you borrow money? The problem for many people is that their financial troubles are already building by the time that they start realise that they cannot pay their bills. They already have a low credit score so their options for borrowing money are limited. In this case, they should look for a place that will lend without a complete credit check. Online personal loan providers often only ask for a bank statement and a pay stub. If you can provide these, you may be able to get a loan to cover your bills for a month or two.
4. Cancel or downgrade unnecessary services. If you have cable or internet service, consider cancelling or downgrading. The same with your cell phone. Basic service is cheaper than service with “bells and whistles.” Once you are in better shape financially, you can start adding these extras again.
5. Think long term. If you have a problem paying your bills for a month or two, that is one thing. However, if this is an ongoing problem, you are going to need to start planning major changes. Perhaps you could consolidate loans, look for a better paying job, move to a cheaper home or sell your car and rely on public transportation. You should consider making such moves because they could protect you from having to go through the same bill payment problems in the future.