How to Catch Up on Important Bills

by Lisa McQuerrey
Getting behind on your bills can put your credit at risk.

Paying your bills on time is an important part of adult financial responsibility. Staying on top of debt and honoring your financial commitments builds a strong credit score, which will help you secure loans in the future, such as education loans, mortgages and auto loans. Good credit can also help you obtain the best interest rates whenever you seek financing.

Prioritize your financial obligations. If you fall behind on important bills, take into consideration the payment due date, the minimum payment required and the potential penalty for failing to pay the bill on schedule. For example, falling behind on high-interest credit cards can result in an increased interest rate, over-limit fees or even a freeze of your account. Falling behind on a utility bill may mean you wake up to no heat in your apartment. If you don't make your car payments, your car will disappear one night. Identify the important bills and know the consequences if you don't pay them.

Make a budget. Look at all your recurring bills and expenses so you know where you can cut corners, eliminate nonessentials and put extra cash toward catching up on important bills. For example, if you're two months behind on your car payment, a detailed budget can help you see where you have the room to save money. Stop eating out for a few months, drop your gym membership or get rid of cable and put that extra money toward your car payment until you're caught up.

Contact your creditors. If you have a good relationship with your bank or credit card company and previously paid your bills on time, your creditors might give you an extension or let you skip a payment in order to catch up. This approach also keeps you in contact with creditors and lets them know you aren't avoiding your debt, but rather are trying to fix your finances and come current on bills.

Take a temp job or ask for extra hours at a job you have to bring in enough cash to catch up on important bills. If you have specialized skills, look for freelancing or independent contractor opportunities. Raise cash with a yard sale or by selling unwanted goods online.

Approach your parents for a loan to cover the past-due amounts on your important bills. Be prepared to show them that you can stay current on your bills if you can just catch up. Have a repayment schedule drawn up that describes the amount and frequency of the payments to your parents.

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