Unfortunately, everyone can get into a situation where you can’t pay your bills on time, and it doesn’t always have to be your own fault.You may lose your job, get sick or get divorced, but you may have spent too much money for a period of time.
Whatever the reason, it is important to recognize the problem as soon as possible, although you may feel a little embarrassed as it provides the best opportunities to get the problem resolved and move on.
Make a list of debts and unpaid bills
The first thing you should do is make a list of all your debts and your unpaid bills. It should include how much you owe, how much you pay monthly and how many payments are left, as well as interest rates.
Make a budget
You make an overview of all your expenses including living expenses and consumption, but without the payments on the debt.
Then you deduct your income and then you see how much you have to pay on your debt.
If that’s not enough, think about how to make more money. It can be both more revenue or less expenses.
Do you have the opportunity to take some overtime? Or maybe an extra job?
If you do not have the opportunity to increase revenue, you will have to look at your expenses. Is there anything that can be reduced? Are there memberships that can be avoided? Can you take the bike instead of the car and can you choose a smaller TV package?
Prioritize debt and creditors
Although, of course, you would like to pay everyone what you owe, it may be necessary to prioritize.
You must pay overdue expenses for water and heat, as otherwise you risk being closed.
If there are payments that fall away in a few months, you should consider paying them first as it gives extra air in the budget to other bills.
Contact your creditors
Once you have an overview of your debt, your budget, as well as prioritize what is most important to pay first, contact your creditors. Of course, you cannot downgrade a payment without having an appointment in place.
In some cases, it will even be possible to pool all debt and unpaid bills into a loan with a reasonable interest rate and settlement.