How To Avoid Problems When You Fall Behind On Your Bills

How To Avoid Problems When You Fall Behind On Your Bills

Chris Potter


I hear a lot about debt these days, and it makes me think how we are all just an event away – or maybe two – of facing serious financial trouble. It’s easy to look at people with bad debts and think it wouldn’t happen to you. But, we just don’t know their situation.


Imagine, just for a second, that your household lost a whole income. Perhaps the company you work for goes bust, or maybe you get made redundant – it happens every day, and one day, it could happen to you, me, or any of us.


So, because I think it’s important to be aware that things could change easily, I thought I would share some ideas with you. If you start to struggle and fall behind with your household bills, some of these ideas might help.


Prioritize your debts


Some debts are more important than others, and you are going to need to prioritize. Make a list of all your bills and work out how much you owe, to whom, and for what. This is the first step to getting a firmer grip on your situation, and it will help you feel more in control.


As a general rule, you should sift out any unsecured loan payments. Although it is morally correct to pay them back, right now they aren’t a priority. You need to look at the most important debts first, such as your home loan and your taxes. These should be followed by any other secured loans, and then your utility bills.


Your tax and your home loan are your most important debts. Failing to pay tax could see you go to prison while you could lose your home if you fail to keep up with your mortgage. Don’t forget that you need to pay property taxes, too. Loan experts Reliance make it clear that if you don’t pay these, you could face further charges and risk the security of your family.


Make a budget plan


Your next step is to make a budget plan. Jot down all your incomings and compare it with your outgoings. Think about any savings that you have stashed away, too. Could they help you out of a tight spot? And, is there any way you could get another income stream from for a while?


Look at areas where you could cut costs. Anything that you pay for that you don’t have a contract for can go right away. This will be things like cable TV packages, magazine subscriptions. It might only be a couple of dollars a month per subscription, but add them up and you can make significant savings.


Get in touch with your creditors


Your next step is to get in touch with your creditors, from the most important to the least. Explain your situation and let them know how much you can afford to pay back each month, taking future payments into consideration.


Bear in mind that most lenders understand about your debts, and as along as you make an effort to pay what you owe, they will cut you some slack. Pump in as much money as you can into clearing your debts, and tackle them all one at a time.


The main thing is, don’t be afraid. It isn’t against the law to owe money, and if you plan your course of action well, there will be an end to it. Good luck!


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