How Not To Pay Bills

If you are having a hard time paying bills due to unforeseen circumstances, then you should take a look at this article. It outlines what bills should be paid first and why.

While it would be nice to not have to pay all of our bills, it is a fact of life and paying bills is a necessity for everybody. If you have found yourself in a situation where you cannot pay off all your bills, then you need to know how to pay them properly so that the least amount of damage is done.

Paying bills the right way

The right way for paying bills is to obviously pay them all on time in full. This is not always possible due to bad luck, bad planning or bad decision-making with finances.

Here are some helpful tips to help you figure out a plan when your money is tight.

1. Prioritize. If you have to pay a bill late than you need to look at the consequences of paying it past its due date. An example of this would be a rent payment, where the landlord could evict you very quickly. This would be a drastic situation, and if it is a question of paying your rent or paying your phone bill, then the rent would definitely be at the top. Auto lenders and mortgage lenders are more likely to start collection actions quickly, while student loan lenders, medical providers and credit card companies usually wait for months before taking action.
2. Make a list. There are essential bills and nonessential ones, and writing them down and prioritizing them on paper can help you see the picture much more clearly. Your essential bills would be your mortgage or rent, child care, utilities, food and any related work expenses such as payments on a car. Taxes and child support would also fall into this category. The nonessential group of bills would be most of your other payments.
3. Your credit score. In most cases you will have 30 days before a late payment is reported to the credit bureau. This can buy you some time to work with your creditors and see if an arrangement for payments can be made. Your credit score will be more affected if you are very late on your payments. Luckily, your credit history can be cleared up if it has been damaged, but this can be a very lengthy process.When you are paying bills keep in mind that it takes about 90 to 120 days of being late to lose your home, one to 60 days to lose your car if you have a late payment, and if you are 270 days late on your student loan you will face a tax refund seizure or a wage garnishment.

The consequences for child support, tax debt and collections accounts will depend on how aggressive the collector is and how much you owe. For credit cards, your late payment will be sent to collections after they have been late for 180 days.

Paying bills is a necessity of life, and if you have run into some hard times and need to allocate payments according to priority, then use the suggestions above so that you can minimize the damage.

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