Handling Bill Paying During a Financial Crisis

Many circumstances can derail even the best financial plans and leave you with less money than you need. However, paying the most important bills first and communicating with creditors for the ones you cannot pay can help you minimize the damage until you are back on your feet.

Your monthly obligations may include:

• Mortgage or rent. Your mortgage or rent should be the first bill paid each month. However, if making payments is impossible, let your lender or landlord know – they may be willing to work with you. Is your mortgage or rent affordable long-term? If not, you may want to look for a cheaper place to live.

• Car loan. Since your car can be repossessed if you miss payments, paying on time is important. However, if you are not able to do that, ask your lender if you can skip a payment or two or pay back missed payments gradually. If you cannot reach an agreement or resume payments, you may want to sell the car before it is repossessed.

• Utilities. Delinquent utility payments can cause your service to be suspended or terminated, but some utilities are more important than others. If a service is not needed, you may just want to cancel it. If it is essential, call the utility company and ask if a payment arrangement is possible. Also inquire about assistance programs for people facing economic hardship.

• Student loans. If no payments are made for 180 days, you are considered in default, with possible consequences including tax refund interception and wage garnishment. However, borrowers can often avoid delinquency by asking for a forbearance or deferment.

• Credit cards. While you could be sued or have accounts go to collections if you stop making payments, credit cards are less important than a mortgage or a car loan, and most creditors do not take legal action right away. However, avoid completely ignoring creditors. If making payments is difficult, you may want to talk to them about hardship programs.

You do not have to deal with financial hardship alone. As a benefit of your membership, you have access to BALANCE, a free financial education and counseling service. Their counselors can discuss options for handling debt and other bills as well as help you create a budget. Call 888-456-2227 or visit www.balancepro.net for more information.