Personal finance can be difficult. When the creditors start calling, your stress levels can go through the roof. But if you’re having trouble paying your bills, you may not be out of options just yet. Here are some things you can do.
Prioritize and respond
Your bills are all obligations, but they are not all the same. You have certain expenses that are absolutely mandatory, like your groceries or your rent. Others are more discretionary. Some have high interest rates, meaning they’ll mount up fast if you don’t pay them down; others have low interest rates, meaning you have a bit more of a margin for error. Some debts are able to be discharged in bankruptcy, while others cannot be.
These are all factors that you need to consider. Sit down and put your bills in order. If you can’t pay them all, you need to decide which to pay, in full or in part.
Call the people billing you
You get a lot of bills, and some of them work different from others. Some organizations have in-house billing departments, while others outsource the work. Some bills are set in stone, while some are surprisingly less so. It’s important to remember that professionals who provide you with services are not strictly in it for the money, explain the pros at a center for orthopedic care in New Jersey; and while nobody can make a living without charging for what they do, the work itself is usually just as important. You should be polite when you call an organization billing you, and you should remember that nobody owes you anything — but you should also ask about your options, because they may offer payment plans, deadline extensions, discounts, or even billing errors to be corrected. Any of these things could work in your favor.
Believe it or not, some hospitals will cut down bills drastically if you call to make your case. Some smaller businesses may decide that it’s better to get some payment than none (though you shouldn’t expect them to be happy about it). And some generous souls may even decide to forgive your debt entirely.
Again, this won’t always be an option; sometimes the company will be too big and uncaring or the situation too dire. And you should be wary of what you say or agree to without consulting a lawyer or financial adviser. Still, in some cases, you’ll get surprisingly lucky.
Refinance your loan
A more formal version of the discounts, extensions, and other breaks that we described above is refinancing. Under a refinancing agreement, you’ll pay a reduced amount each month to get your bills paid off. Generally speaking, refinancing means taking out a second loan in lieu of paying the first; for instance, if you refinance a home loan, you’re taking out new debt that will cover the old debt, and setting up your new loan payment schedule to work better for you than your old one’s would have.
It’s worth noting that refinancing isn’t just something that people do when their bills get out of control. Sometimes, changes in interest rates can make refinancing a no-brainer even to those who are perfectly financially stable. Just keep in mind that mortgages have closing costs, which can offset the savings of refinancing.
Call in the experts
If you’re having serious money problems, you need serious expertise in your corner. That’s why you should consider financial advisers and attorneys.
A financial adviser isn’t just someone you call when you want to figure out how to invest your retirement savings. Such a professional can also help you when bills are closing in — and, sometimes, it is possible to get their help for free. Sound financial advice that is tailored to your specific situation is something that you can only get from a financial pro who understands your situation.
An attorney can be a vital ally, too. At some point, your situation may become dire enough for you to consider bankruptcy. If you reach that point, you need to get in touch with a lawyer right away. Similarly, you’ll need a lawyer right away if you have any sense that your lenders are moving to repossess your belongings, particularly (through foreclosure) your home.
Not being able to pay your bills is a terrible feeling. But it’s not the end of the world, so don’t give up. You can achieve a brighter future.