Not being able to afford to pay the bills for your debts is a scary prospect – but it’s something that can happen to anyone. Whether you’ve taken on too much debt or have experienced a sudden decline in income, there may come a time when you simply don’t have the cash you need to send to your creditors.
If this happens to you, it’s important you react quickly to try to mitigate the damage to your credit and to your overall financial life. To help you get started, here are the steps you can take.
Try to find the cash
It may seem obvious, but if you can’t make your monthly payments, the first thing you should try to do is to free up enough money to get your bills covered. This approach is the only surefire way to avoid late fees, potential damage to your credit score, and other consequences.
Finding a side gig to bring in more income is one possible approach, or you could try to sell non-essential items you have around the house. These may be short-term solutions, unless you have the time to keep your side gig until you’ve paid down debt to a more manageable level. These solutions can at least buy you time to put other plans for dealing with debt into action.
You should also take a very close look at your budget – or make a budget if you aren’t already living on one. By taking control of your spending, you may be surprised how much cash you can free up to pay the bills.
Unfortunately, there are situations where finding the money is simply impossible. If that’s the case for you, you’ll need to move on to the other suggestions on this list.
SOURCE: Christy Bieber, The Motley Fool