What to do if you can't pay your bills | Consumer Financial Protection Bureau (2023)

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If you have trouble paying your bills, or loans, or paying on time, there are options for help, especially if you reach out early to your lenders or creditors.

If you can still pay your bills, you will likely be better off staying on track. Keep in mind that if you decide to use a program that lets you pause or reduce payments, you will still owe the money you have not paid once the program ends.

If you lose your income

State and local governments vary in the programs and offerings to help those financially impacted by the coronavirus.

In March 2021, Congress passed, and the President signed, legislation providing an additional $300 weekly federal enhancement to all workers entitled to unemployment benefits. The supplement begins after March 14, 2021 and ends on September 6, 2021. The legislation also extends the Pandemic Unemployment Assistance program which provides unemployment assistance to the self-employed and gig workers. Contact your state’s unemployment office or program for information or to apply for benefits.

You can look to your state’s unemployment insurance office or program to identify current options for benefits.

(Video) Five tips for when you can’t pay your bills - consumerfinance.gov

1. Contact your lenders, loan servicers, and other creditors

If you can’t make a payment now, need more time, or want to discuss payment options, contact your lenders to explain your situation, and check their websites to see if they have information that can help you. Being behind on your payments can have a lasting impact on your credit.

The CFPB and other financial regulators have encouraged financial institutions to work with their customers to meet their community needs. Many lenders have announced proactive measures to help borrowers impacted by COVID-19. As with other natural disasters and emergencies, they may be willing to provide:

  • Forbearance
  • Loan extensions
  • A reduction in interest rates
  • Other flexibilities for repayment

Credit card companies and lenders may be able to offer you a number of options to help you. This could include waiving certain fees like ATM, overdrafts, and late fees, as well as allowing you to delay, adjust, or skip some payments. Some lenders are also saying they will not report late payments to credit reporting agencies or waiving late fees for borrowers in forbearance due to this pandemic.

(Video) What should you do when you can't pay your bills?

What to say when you contact a lender

When contacting your lenders, be prepared to explain:

  • Your financial and employment situation
  • How much you can afford to pay
  • When you’re likely to be able to restart regular payments
  • Your income, expenses and assets

Be sure to get confirmation of any agreements in writing.

Learn how to talk to your credit card company

Consider working with credit counselors to understand your options

Reputable credit counseling organizations are generally non-profit organizations that can advise you on your money and debts and help you with a budget. Some may also help you negotiate with creditors. These trained professionals provide advice for little or no cost, and they will work with you to:

  • Discuss your situation
  • Evaluate options
  • Help you negotiate with your lenders and servicers

There are specific questions to ask to help you find a credit counseling organization to work with.

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Warning: If you’re considering working with a debt settlement company to address your debts, be skeptical of any company that promises to do it for an upfront fee.

2. Keep your money safe

Whether or not you’ve experienced a financial hit, don’t head for the ATM to withdraw more cash than you usually need.

Your money is safe in your bank or credit union account. Unlike money kept at home, you likely have federal protections if money you’ve deposited is taken illegally and in the unlikely event your institution shuts down. You will always be able to get cash when you need it. The professionals restocking cash machines and moving money across the country are on the job and are considered essential service workers.

Generally, all bank deposits up to $250,000 are insured by the Federal Deposit Insurance Corporation. Deposits at all federal credit unions, and the vast majority of state-chartered credit unions, are also insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF).

Here is more from the FDIC Chairman Jelena McWilliams.

(Video) Turning financial services complaints into action: The CFPB works for you - consumerfinance.gov



What happens if you can't pay your bills? ›

Late payments can remain on your credit report for up to seven years, dragging down your credit score. Your assets may be seized. If you have a secured loan or credit card, the lender may seize any assets you put up as collateral, such as your car, home or bank account funds. You may be taken to court.

What are 3 things you can do to help you remember to pay your bills on time? ›

Review these tips to help you make sure you're always paying your bills on time.
  1. Set Up Autopay. The easiest, most efficient way to ensure you pay your bills on time every month is to set them up on auto-pay. ...
  2. Set Calendar Reminders. ...
  3. Adjust Your Due Dates. ...
  4. Sign Up for Payment Reminders. ...
  5. Consider a Debt Management Plan.

How can I get money to pay my bills? ›

If You're Struggling With Utility Bills

First, you should always contact the utility directly and ask for help. Most utilities have various forms of assistance, from payment plans and low-income programs to local assistance agencies that can help you pay your bills and keep essential services from being disconnected.

What happens if I can't make my minimum credit card payment? ›

The credit card company is likely to raise the interest rate on your account. It can do that after two consecutive missed payments. The issuer also must inform you how long it will impose the penalty rate. It could be until you have made 12 consecutive on-time payments, or even indefinitely.

What happens if you owe and cant pay? ›

The majority of creditors will sell your debt to a collection agency.” Under federal law, a credit can send your account to a collection agency after it's 31 days past due. Still, that isn't likely to happen. As Solomon says, that usually doesn't happen until about the second or third month.

What can I do if I'm struggling with money? ›

Coping with debt

Other organisations offering helpful advice online include: Money Advice Service, or call 0800 138 7777 from Monday to Friday, 8am to 6pm. National Debtline, or call 0808 808 4000 from Monday to Friday, 9am to 8pm. StepChange Debt Charity, or call 0800 138 1111 from Monday to Friday, 9am to 5pm.

What is the smartest way to pay bills? ›

Paying by Direct Debit means your bills are paid on time, so you'll avoid late-payment charges. Some companies offer discounts for customers who pay by Direct Debit.

How do I negotiate my bills? ›

Here are the five principles you can use, starting now, to lower your monthly bills.
  1. Speak in a friendly-assertive voice, no matter what happens. ...
  2. Ask for more than you want, then slowly back down. ...
  3. Only negotiate with someone who has the power to do so. ...
  4. Always have a backup solution. ...
  5. Know when to stop.

What do you do when you have a lot of bills? ›

  1. Take Inventory of Your Bills.
  2. Start Condensing Your Bills.
  3. Get Rid of Some Expenses.
  4. Contact The People You Owe.
  5. Make More Money.
  6. Avoid Excuses.
4 Mar 2021

How can u get free money? ›

Here are 10 legitimate ways to get free money online:
  1. Join a Focus Group.
  2. Start Some Freelance Work. ...
  3. Review a Mock Trial. ...
  4. Earn While You Shop. ...
  5. Sign Up for Surveys. ...
  6. Watch Videos. ...
  7. Listen to Music. ...
  8. Play Games.

How do I pay for something I don't have money for? ›

Gift cards and vouchers

Gift cards, vouchers and store cards all basically serve the same function. You use them like a pre-paid credit card. Money is pre-loaded on the card and it can be used until all the money is spent.

Will the government help with energy bills? ›

One-off energy payments from the government

All households with a domestic electricity connection will be automatically paid a £400 payment over 6 months between October 2022 and March 2023 to help with energy bills.

What is a hardship payment plan? ›

A credit card hardship program is typically a payment plan that you negotiate with your card's issuing bank. The bank may waive fees and/or lower interest rates over a specific time frame — often a short-term period such as three months or longer.

How do I get rid of credit card debt without paying? ›

This could be in the form of an Individual Voluntary Arrangement (IVA), a Debt Management Plan (DMP), a Debt Relief Order (DRO), bankruptcy or a debt settlement offer. It's generally a good idea to seek proper advice before opting for any one debt solution to take care of the money you owe as they all work differently.

Can credit card debt be forgiven? ›

Credit cards are another example of a type of debt that generally doesn't have forgiveness options. Credit card debt forgiveness is unlikely as credit card issuers tend to expect you to repay the money you borrow, and if you don't repay that money, your debt can end up in collections.

How long can you go without paying debt? ›

A collector only has a certain number of years where they can take you to court to force you to pay a debt that you owe. The maximum statute nationwide is 15 years. However, in most states, the period for credit card contracts and loans is limited to 4-6 years.

How do I talk to a creditor if I can't pay? ›

Tell them your family income is reduced and you are not able to keep up with your payments. Frankly discuss your future income prospects so you and your creditors can figure out solutions to the problem.
If you don't pay your bills
  1. Ask the name of the caller. ...
  2. Remain calm. ...
  3. Dispute debts in writing.

Where can I get emergency money? ›

You need to open a bank account and set up an emergency fund. When you decide to set up an emergency fund visit your preferred bank and have them open a suitable account for you. If a bank allows you to have an emergency fund as a high interest savings account, then that is what you should go for.

Is it better to pay bills weekly or monthly? ›

While nobody really looks forward to doing their bills monthly, much less even more frequently, experts agree that making weekly time for bills is a smarter way to go. Reviewing and paying bills on a weekly basis can save you headaches, hassles and keep you ahead of your financial goals.

Which bills should I pay first? ›

Which Bills Should Be Paid First? Generally, the bills you should pay first are the ones that cover necessities — the main resources that keep you and your family safe and healthy. These necessities include shelter, water, heat and food. Once necessities are paid for, focus on expenses related to your vehicle.

Is it better to pay bills monthly or quarterly? ›

However, there tends to not be much difference in price between a quarterly and a monthly plan. Some suppliers will offer a discount if you pay your bills by quarterly direct debit. However, the discount might be more or less than the discount for a monthly direct debit – so explore all your options before you choose.

How do I break up a large bill? ›

10 Places to Break a $100 Bill
  1. Banks or Credit Unions. Banks are one of the easiest options to get change for your bigger bills, since no purchase is required and no fees are charged. ...
  2. Your local grocery store. ...
  3. Walmart Stores. ...
  4. Target Stores. ...
  5. Restaurants. ...
  6. Bars. ...
  7. Pawn Shops. ...
  8. Laundromats.
19 Nov 2021

What can I say to collection agency to negotiate? ›

Start by offering cents on every dollar you owe, say around 20 to 25 cents, then 50 cents on every dollar, then 75. The debt collector may still demand to collect the full amount that you owe, but in some cases they may also be willing to take a slightly lower amount that you propose.

How can I get free money from the government 2022? ›

10 ways to get free money from the government:
  1. Temporary Assistance for Needy Families.
  2. Supplemental Nutrition Assistance Program.
  3. Emergency Rental Assistance.
  4. Low-Income Home Energy Assistance.
  5. The Lifeline Program.
  6. Child Care and Development Fund.
  7. Down Payment Assistance.
  8. Pell Grant.
25 May 2022

Does Cash app let you borrow money? ›

Cash App Borrow is a type of short-term loan offered through the Cash App platform. This is how it works: If you're eligible you can take out a loan from $20 to $200. You then have four weeks to pay back the loaned amount plus a 5% flat fee.

How can I get money fast without a loan? ›

16 ways to find fast cash
  1. Sell something. If you have anything sitting around your house collecting dust, then you could turn it into cash. ...
  2. Pawn something. ...
  3. Sell unused gift cards. ...
  4. Access your paycheck earlier. ...
  5. Take on a freelance gig. ...
  6. Pet sit. ...
  7. Babysit. ...
  8. Ask for a loan from a family member or friend.
9 Nov 2022

How do you qualify for help with energy bills? ›

If you have high energy costs, you'll get the Warm Home Discount if you get any of the following benefits:
  1. Universal Credit.
  2. Pension Credit Savings Credit.
  3. Housing Benefit.
  4. income based Jobseeker's Allowance.
  5. income related Employment and Support Allowance.
  6. Child Tax Credits and Working Tax Credits.
  7. Income Support.

How do I get the 650 cost of living payment? ›

You may get a payment of £650 paid in 2 lump sums of £326 and £324 if you get payments of any of the following:
  1. Universal Credit.
  2. income-based Jobseeker's Allowance ( JSA )
  3. income-related Employment and Support Allowance ( ESA )
  4. Income Support.
  5. Pension Credit.
  6. Child Tax Credit.
  7. Working Tax Credit.

How do I get the 400 energy grant? ›

Importantly, you don't need to apply for the scheme, all households will start to receive £400 off their energy bills from October 2022. Each energy supplier has been asked to pay customers who have an electricity supply, so this means if your electricity is with us, you'll get your payment from E.ON Next.

What is considered proof of hardship? ›

Documentation Required: Current written statement or notice from landlord, bank, or mortgage company on their letterhead detailing amounts due necessary to prevent the eviction or foreclosure. If written statement from landlord is provided, you must include a copy of the lease agreement.

Who qualifies for a hardship payment? ›

  • You must be 18 or over (16 if your payment is reduced because of fraud).
  • You must be struggling to meet your basic needs or the basic needs of a child or young person you're responsible for. ...
  • You must have made every effort to stop spending money on non-essential things.

What is considered personal hardship? ›

Hardship is a situation in which your life is difficult or unpleasant, often because you do not have enough money.

How do I wipe out my debt? ›

Ways to clear your debt
  1. Informally negotiated arrangement.
  2. Free debt management plan (DMP )
  3. Individual voluntary arrangement (IVA)
  4. Bankruptcy.
  5. Debt relief order (DRO)
  6. Administration order.
  7. Debt consolidation and credit.
  8. Full and final settlement offer.

How do I get myself out of debt? ›

How to Get Out of Debt
  1. List Everything You Owe.
  2. Decide How Much You Can Pay Each Month.
  3. Reduce Your Interest Rates.
  4. Pay Your Bills on Time Each Month.
  5. Be Diligent Moving Forward.

How much debt is too much? ›

Debt-to-income ratio is your monthly debt obligations compared to your gross monthly income (before taxes), expressed as a percentage. A good debt-to-income ratio is less than or equal to 36%. Any debt-to-income ratio above 43% is considered to be too much debt.

Can debt be written off due to mental health? ›

Mental health and debt write off

If your circumstances are unlikely to improve then you can ask your creditors to write off the debt. Write off is usually seen as a last resort, where there are no assets or money to pay the debt.

How do I ask for debt forgiveness? ›

I respectfully request that you forgive my alleged debt, as my condition precludes any employment, and my current and future income does not support any debt repayment. Please respond to my request in writing to the address below at your earliest convenience. Thank-you in advance for your understanding of my situation.

Can you be forced to pay credit card debt? ›

While debt collectors cannot have you arrested for not paying your credit card debt, creditors can still use the legal system to make sure they get their money back. The most common legal recourse is to sue you for payment. If you get sued for unpaid credit card debt, don't ignore the lawsuit.

How long can you not pay a bill? ›

Some utility providers will terminate service as early as one week after the bill's due date and require a hefty amount of money to restore these services. Other companies, like phone providers, may shut off service anywhere between 45 to 60 days after the bill is due.

How long can you owe a bill? ›

In most states, the debt itself does not expire or disappear until you pay it. Under the Fair Credit Reporting Act, debts can appear on your credit report generally for seven years and in a few cases, longer than that.

Can you go to court for not paying bills? ›

If you do not pay your Council Tax bill instalments, you could face court action and a fine. If you do not pay your instalments on time, you could face court action, leading to additional fees of £132.50.

How do you pay your bills when you are broke? ›

You can pay off debt when you're broke, but not without making some financial changes first. Here are 10 ways you can get it done.
  1. Create a Budget.
  2. Broke or Overspent?
  3. Put Together a Plan.
  4. Stop Creating Debt.
  5. Look for Ways to Cut Your Expenses.
  6. Increase Your Income.
  7. Ask for a Lower Interest Rate.
  8. Pay on Time and Avoid Fees.
1 Jun 2022

What can you do to prevent paying bills late? ›

Top 10 Ways to Prevent Late Payments
  1. Use Financial Software With Automatic Bill-Paying Reminders. ...
  2. Schedule Bill-Paying Time. ...
  3. Create a Bill-Paying Location. ...
  4. Organize Paper Bills. ...
  5. Give Your Payment Time to Arrive. ...
  6. Learn Your Billing Cycle. ...
  7. Sign Up to Receive Bills or Bill Reminders Via Email. ...
  8. Use Your Phone to Pay.

What should you not say to debt collectors? ›

What Not to Do When a Debt Collector Calls
  • Don't Give a Collector Your Personal Financial Information. ...
  • Don't Make a "Good Faith" Payment. ...
  • Don't Make Promises or Admit the Debt is Valid. ...
  • Don't Lose Your Temper.

Do debt collectors give up? ›

Do debt collection agencies ever give up? Debt collectors will chase you for a long time to get payment for what you owe. At the end of the day, it is their job to make sure the debt is paid, so they will do whatever they can to collect the balance.

What are the new debt collection rules? ›

In late 2021, new rules from the CFPB around how debt collectors can disclose information about a debt and when they can mark a debt on a consumer's credit report went into effect. There are also new limits on actions around "time-barred debt," which is debt past the statute of limitations for suing over the debt.

Can someone be jailed for debt? ›

The short answer to this question is No. The Bill of Rights (Art. III, Sec. 20 ) of the 1987 Charter expressly states that "No person shall be imprisoned for debt..." This is true for credit card debts as well as other personal debts.

Can the court look at your bank account? ›

To find out if you've got savings or are expecting a pay out, your creditor can get details of your bank accounts and other financial circumstances. To do this they can apply to the court for an order to obtain information. You'll have to go to court to give this information on oath.

What happens after a Judgement is entered against you? ›

Does someone have a judgment against you? You cannot be sent to jail for failing to pay a debt or for having a judgment against you; however, a judgment can greatly affect your financial position. A judgment allows a creditor to garnish wages, garnish bank accounts, or take a lien against property in your name.


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