Top 10 Things You Shouldn't Do If You Cant Pay Your Bills

Top 10 Things Not to Do If You Cant Pay Your Bills

Posted on October 15, 2008
Filed Under budget, debt |

It seems that I learn things the hard way. I know better than all of these but I keep doing them anyway so here goes a quick list of things that it’s a really, really bad idea to do if you can’t pay your bills.

Go Shopping! I know it makes you feel better to go out and spend a little money but really, if you can’t pay your bills perhaps you could spend that money sending them all a smaller than minimum payment.
Go Out To Dinner! Yup, this is right up there with shopping. Eating makes you feel better but it doesn’t help get the bills paid. Stay home and plan a yard sale. Sell all the things that you bought on previous shopping trips.
Write Bad Checks. Some people seem to think that it’s better to just put the check in the mail and PRAY that the money gets to the bank first. Don’t Do It! Chances are pretty good that the check will hit the bank before your deposit does and returned check charges are a huge drain on your finances.
Ignore them! I have known and have been one of those people who think that if you ignore them, they will go away. They won’t and it’s in your best interest to try to negotiate with your creditors before they get to the point of no return. If your behind in your bills with your original creditors (and they have not been placed with a collection agency) then you should take their phone calls and tell them your situation. Try to work out a payment plan that you can afford and follow it up with a letter stating the payment you can afford. Most creditors will work with you to some extent.
Pay bills with a credit card. You are compounding your problem and eventually you will not be able to pay your credit card payments either.
Borrow from your 401(k) to pay bills. Although you will get a lower interest rate from your 401(k), it costs you more in the long run because of the loss of interest, dividends or capital gains. If you leave your employer for any reason before you pay the loan off, you must repay the loan immediately or it is considered an early withdrawal subject to tax and penalties.
Refinance with a “Too Good To Be True Mortgage”. Yup, they are still out there and if the payments or interest rates sound too good to be true, they probably are. Be sure to ask your lender how much your payments can go up, not just the interest rate but the payment amount in the worst case scenario. It might also be a better choice to look into a second mortgage with a fixed interest rate. Even though the interest rate might be higher, the length of the loan will likely be shorter and you will save money on interest over the life of the loan.
Don’t threaten your creditors with bankruptcy unless you are truly considering it. This may cause them to accelerate their collection attempts and it really does not make them want to help you.
Don’t hide it from your family. Your family should be your emotional support if not your financial support. You need to tell your family so that you can work together to reduce expenses and/or increase income. You cannot correct the family budget by yourself, it will take the coordinated effort of everyone. Remember that you didn’t get into this fix by yourself.
Don’t forget that with a little effort things will get better. It’s really easy when you are drowning in the debt hole to forget to look up. Even in the worst of situations there is always an end in sight and a way out. Take a minute out of every day to find the things to be thankful for and it will help to keep the trials in your life in perspective.

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Comments

4 Responses to “Top 10 Things Not to Do If You Cant Pay Your Bills”

Denise (15 comments.) on October 16th, 2008 9:58 am

What a great entry! I think a lot of us do those things. You aren’t alone!
bouncing betty (11 comments.) on October 16th, 2008 10:59 am

I’ve done 1, 2, 4, 6, 9 and 10 at various times in the past few years. Tried really hard to not do 1 and 2, eventually did not have the funds to do 1 and 2. Number ten is especially important, you have to remember the small things that make a difference and be grateful for what you do have.
What Not To Do if You Can’t Pay Your Bills « Chic Financials on October 20th, 2008 8:03 pm

[...] Your Bills Posted on October 20, 2008 by chicfinancials Today - of all days - I came across this article on the Oh My Aching Debts blog and it was right on time! I think some of the things on the list [...]
Chic Financials (1 comments.) on October 20th, 2008 8:27 pm

Great post! Another thing that comes to mind is don’t pretend you have more than you do. You can turn down offers to go out to lunch with the gang without sharing your financial situation with others. Don’t keep going when you know you really can’t afford to eat out.