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What to Do When You Can’t Pay All Your Bills

You’ve lost your job or for some other reason don’t have enough money to pay all of your bills. Which bills should you pay first and which ones can slide for a while?

 

 

Couple stressed and worried looking at bills

 

Here’s a basic rule of thumb according to the Boston-based National Consumer Law Center in its book, Surviving Debt:

“Always pay essential expenses and debts first. If any money is left, you can decide which nonessential debts, if any, to keep in your expense budget.”

An essential debt represents a serious obligation that if not paid could produce severe, even life-threatening consequences.

Do not make payments on nonessential debts when you have not paid essential ones even if your nonessential creditors are breathing down your neck. Keep your priorities straight.

Please do not misunderstand! I am not suggesting that you should just walk away from your financial obligations. You must pay your creditors, you must pay your bills. To not pay them is not an option.

Of course, it is not ideal to let some of your bills slide for awhile. But your situation is what it is. Your resources are severely limited. In time, as things improve (they will) you will be able to get caught up completely.

But for now, you need to know how to get through this month.

Once you’ve determined which bills are essential, prioritize them according to the severity of the consequences you will suffer for non-payment.

Here is a guide to follow, listed by priority. Read more