What To Do If You Can't Pay Your Bills

If you have trouble paying your bills, focus on the essentials first — pay your rent or mortgage, utilities and buy groceries. Any emergency expense can add stress to an already financially bleak picture. Keep reading to learn about ways to juggle all of your expenses effortlessly.

Key Takeaways

• Focusing on the essentials is the first step — when you can't pay your bills, cover housing, utilities and groceries before anything else while you work toward a longer-term solution.

• Federal programs can help reduce your monthly burden — programs like LIHEAP for energy costs, SNAP for food and the Lifeline benefit for phone service are available to qualifying low-income households at little or no cost.

• Credit card debt can grow fast — pay more than the minimum whenever possible and consider a debt consolidation loan or a 0% intro APR card to slow interest buildup.

• Refinancing can lower your monthly loan payments — though extending your term means staying in debt longer, reduced payments can make obligations feel more manageable on a tight budget.

• Replacing lost income is the fastest long-term fix — review your budget to cut unnecessary expenses, explore side hustles for immediate cash flow and pursue new job opportunities or federal assistance while you stabilize.

Summary generated by AI, verified by MoneyLion editors

What To Do First When You're Struggling To Pay Your Bills

Focus first on paying your bills, your housing and food. Avoid spending money on anything unnecessary. You've got to find a long-term solution and know how you got into this situation. Taking out loans only provides short-term relief, and if you can’t make the loan payments, you will fall further behind on future expenses. 

Over 60% of Americans live paycheck to paycheck, according to survey from LendingClub. This explains why many consumers have a difficult time staying on top of bills.

If You're Falling Behind on Rent or Mortgage

• You can get assistance from local, state and tribal governments. Rental assistance programs make rent and mortgage payments feel more doable.

• Renters looking at an eviction can consult the U.S. Housing and Urban Development’s (HUD) Find Shelter tool to locate emergency housing.

• Consider downsizing to a more affordable home or unit. Living further away from the city can help you find more attractive prices.

• Split rent payments with friends

• If you own a home, you can list some of your rooms on Airbnb to generate income from your home.

If You're Struggling With Utility Bills

There are ways to find relief, even with your monthly utility bills. Here are some pointers:

• Reach out to the Low Income Home Energy Assistance Program (LIHEAP). The government program can steer you in the right direction, but you can also monitor utility bills and look for opportunities to save.

• Consider home improvements, if they're affordable — they can make your home run more efficiently and thus, lower utility bills.

• Try everyday habits to save on pennies — keep your shades down, use appliances during off hours, i.e., morning and evening, running full loads in the dishwasher and keeping the lights off when you're not using them will also lower your utility bills.

If You're Struggling With Credit Cards

Making more than the minimum payment whenever possible is the best way to get out of credit card debt in the long term. Here's what else you can do:

• Keep making progress on paying off your credit card, because interest compounds and adds onto your balance, which can make your debt grow fast.

• If you can keep your spending in check, you're already one step in the right direction.

• If you earn points, you can use the remainder to spend on some everyday purchases so you're not spending extra cash.

• You can use a debt consolidation loan to replace credit card debt with a new loan that has a lower interest rate.

• You can also open a new credit card with an introductory 0% annual percentage rate (APR). Using that card for purchases during the introductory period will prevent interest buildup.

If You're Struggling With Student Loans

Trimming your expenses will help, but that won't always work if you're on a shoestring budget. Consider refinancing instead.

• You can refinance your student loan and increase the loan's duration.

• While this strategy will keep you in debt longer, a refinance can reduce your monthly payments. You'll get a new interest rate for your loan.

• The new rate can save you money if it's lower than your current rate, but it may be difficult to find a lower rate in this economic cycle. You would have to get your student loan refinanced by a private lender.

• The government does not offer student loan refinancing.

If You're Struggling With Numerous Types of Debt

Even though making the minimum payment is a great starting point, you can take it a step further. Here's what you should do if you have different types of debt to tackle:

• Pay down the principal first — this helps you get out of debt sooner.

• Consider debt consolidation.

• Use lower-interest debt to pay off high-interest debt to reduce how much interest you'd end up paying in the long term.

• If you refinance to extend the loan term, it'll keep you in debt longer. However, your payments will be lower, making the debt feel more manageable.

If You're Struggling To Buy Food

While the Supplemental Nutrition Assistance Program is a great starting point for qualifying consumers, there are more options available to you.

• SNAP helps low-income families afford food.

• Consider reevaluating your food bill. Snack food like a chocolate bar or bag of chips rarely provides sufficient nourishment and still commands high prices.

• You shouldn't get rid of the essentials, but trimming your grocery bill can lead to healthier habits and more money in your pocket.

If You're Struggling With Your Phone Bill

• The Federal Lifeline Program pays phone bills for qualifying families. Some families get discounts, while others get their entire phone lines covered.

• You can lower your current bill by modifying your insurance policy and avoiding new smartphone models.

• You don't have to replace your phone every 12 to 24 months. When you have to replace your smartphone, don’t buy the latest version. Most smartphones have the same basic features.

If You’re Struggling With Medical Bills

Medical bills are some of the most challenging expenses because of the high price points and how some circumstances can make these bills feel never-ending.

The government has several programs that can assist with your medical bills, such as:

• The Children’s Health Insurance Program (CHIP)

• Medicare

• Medicaid

If You're Struggling Because You Lost Your Income

Losing income is stressful because expenses initially remain the same. Here are some things that can help:

• You can review your budget to see what you need and what to remove.

• While a personal loan can help with immediate expenses, incurring more debt with less available income to repay the debt can create a larger problem in the future.

• The best solution is to replace the income as quickly as possible. Side hustles give you a quick path to earning additional money.

• You can use your additional time to apply for new jobs or start a business.

If You're Struggling Because of Another Emergency

• You may have to pick up an extra side hustle or work overtime to make ends meet.

• Reviewing your budget and getting rid of unnecessary expenses will also help.

• More consumers are getting defensive as inflation increases the prices of goods and services.

Making Bill Payments Easier

Bill payments can add up, and a few emergency costs can derail many consumers who are trying to stay at breakeven. Federal programs can provide immediate relief, but long-term relief comes from increasing your income and minimizing your expenses. You can capitalize on available programs now and strengthen your financial health so you can more easily overcome future challenges.

FAQ

I can't pay my bills. What should I do?

Take a look at federal programs, reduce expenses and look at additional income opportunities.

What happens if you never pay your credit card?

If you never pay your credit card, your credit score will get decimated. A debt collection agency will likely reach out and request that you pay the debt.

What should you do if you can't make your minimum payment?

If you cannot make the minimum payment, contact your credit card company and explain your situation. You can also get creative with reducing expenses and working a short-term side hustle to cover the difference.

Key Terms

• LIHEAP: A federal program that helps low-income households cover home energy costs, including heating and cooling bills, energy crises and minor energy-related repairs.

• SNAP: The Supplemental Nutrition Assistance Program, a federal benefit that provides food assistance to low-income families to help afford nutritious groceries.

• Lifeline program: A federal benefit that reduces or eliminates phone and internet service costs for qualifying low-income households; eligibility is based on income or participation in programs like SNAP, Medicaid or SSI.

• Debt consolidation: Combining multiple debts into a single loan, typically at a lower interest rate, to make payments more manageable and reduce total interest paid over time.

• Annual percentage rate (APR): The yearly cost of borrowing expressed as a percentage. A 0% intro APR on a new credit card means no interest accrues during the promotional period.

• Student loan refinancing: Replacing an existing student loan with a new loan from a private lender at a potentially different rate or repayment term; the federal government does not offer refinancing for student loans.

Sources:

• U.S. Department of Housing and Urban Development: Find Shelter

• Administration for Children & Families: Low Income Home Energy Assistance Program (LIHEAP)

• USDA Food and Nutrition Service: Supplemental Nutrition Assistance Program (SNAP)

• Universal Service Administrative Company: Lifeline — How to Qualify

Summary generated by AI, verified by MoneyLion editors