What to Do if You Can’t Pay Your Essential Bills

Quick Answer

If your income shifts or you can’t make ends meet and the bills keep piling up, there are ways to pay your essential bills so you don’t fall deeper in debt, including tapping your emergency fund and looking for help.

Man and woman couple struggling to pay essential bills.

When you can't make ends meet and you're staring down a pile of bills, there are several ways to sort things out. Take these four steps to pay your essential bills and find the breathing space you need at the end of the month.

1. Contact Your Bill Provider or Lender

If you feel like you're drowning in debt, you're not alone. In 2020, more than a quarter of adults in the U.S. had one or more monthly bills they could not pay in full, according to a 2021 report by the Federal Reserve. Fortunately, many lenders are willing to work with you to find a solution. After all, it's also in their best interest that you pay your bills on time every month.

Just by making the call, your service provider, credit card company or lender may offer options like waiving certain fees or allowing you to delay, skip or adjust payments. If you know you're going to be late with a payment, you can't make a payment or you just want to discuss your options, contact them and explain your situation.

In return, they may ask how much you think you can afford to pay and when you think you'll be able to restart regular payments. Proactively asking for help is a sign you're serious about your intent to pay your bills and get your finances back in line.

2. Prioritize the Most Important Bills

Although paying all your bills is essential to maintain a good credit score, sometimes you have to prioritize which ones are more necessary than others. Start with your basic needs for food, shelter, utilities and transportation. Keeping the lights on, and making sure you have a roof over your head, a way to get to and from work, and food on the table are all essentials that should come first. Although your obligations may be different, essential bills may include things like:

  • Fixed housing expenses: It's important to pay your mortgage payment or rent, along with your property taxes and any other fixed housing expenses.
  • Utilities: Utilities may include gas and electric, sewer and water, garbage and recycling and all other charges outlined in your utility bills.
  • Child care: If you have children, you may have to prioritize child care payments so you can still work and pay other bills.
  • Health care bills: Besides making sure your health care bills are paid, you may also have bills to maintain your good health like prescriptions, health insurance payments and other health-related items.
  • Insurance payments: Most states require you to pay auto insurance on any vehicle you drive, and you likely are required to have homeowners insurance if you have a mortgage. And if you rent, prioritizing your renters insurance payments may be necessary to ensure your belongings are protected.
  • Transportation-related costs: It's important to cover the cost for basic transportation to and from work or if you need your car in case of an emergency. This might include your car payment, ridesharing, parking and other related expenses.

It can also be a good idea when paying your essential bills to set up automatic bill pay with your bill provider or lender. Automatic bill pay can help you avoid missed or late payments in the future to help keep your credit in good shape.

3. Tap Into Your Emergency Fund or Savings

If you have a savings account or an emergency fund, consider using the funds to pay your essential bills. These accounts can be a financial safety net to gain access to cash fast, and using them is better than relying on high-interest credit cards or loans.

Once you're on better financial footing, you can build up your accounts again. Generally, it's advised to have enough in your emergency fund to cover three to six months of living expenses. An emergency or savings fund can often mean the difference between getting through a short-term tight spot and going further into debt.

4. Seek Help

It's not always easy to ask for help. But it can be better than damaging your credit or going deeper and deeper into debt. Trustworthy credit counseling organizations may be nonprofits that can advise you on how to pay off your essential bills and get on a budget so you don't fall behind again. Advice from most of these organizations is free, while some may charge a small fee.

The Financial Counseling Association of America and the National Foundation for Credit Counseling are great places to start. The Department of Justice also maintains a list of approved credit counselors by state.

Also, a local personal finance counselor may be able to help you develop a plan to pay your essential bills, eliminate debt and come up with a budget. Just make sure the person you work with is accredited by the Association for Financial Counseling & Planning Education (AFCPE). You can check that out by visiting the verification section on the AFCPE website.

You also can find financial assistance or dial 211 to be connected with local agencies and charities that may be able to assist you in paying your bills, getting food or putting you in touch with other resources.

The Bottom Line

Falling behind on your payments can have a lasting impact on your credit. Besides that, you may also be charged late fees and penalties, your utility services may be disconnected, you could be taken to court or have your assets seized. Taking steps as soon as you know you may not be able to pay your bills can help you avoid the most damage. Regularly checking your Experian credit report and credit score for free can also help you keep track of your accounts and see where your credit stands as you seek bill payment solutions.