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It can be stressful to realize you can’t cover all your bills. Regardless of how it happened — unforeseen circumstances like a job loss or emergency, or a mistake like forgetting about a payment — the bills have to be paid. You can’t escape it.

The best thing to do when you find yourself in this troubling situation is to work through things one at a time to find a solution that fits your budget and minimizes any damage to your credit or finances.

Face Reality

When the bills are overwhelming, it might seem like the best solution would be to hide from them and hope they will all go away. Sadly, that will not work. The bills will be waiting for you — and will actually get worse.

Take responsibility for what you owe and do what you can to pay the bills. If you can’t cover the bill, you certainly cannot afford late fees, or, even worse, a hit to your credit. Doing so will just complicate things. Own it and vow to change it.

Figure Out How Much You Owe

Gather your bills. Then, make a list of all of your accounts and the amounts you owe. You can do this old school with paper and pencil or you can go a little more advanced and create a spreadsheet.

Make sure you include past-due amounts and late fees in these totals. Don’t forget anything: Your bills might include utilities, cellphone, mortgage, credit cards, student loans, insurance, etc. Now that you have the bills, add the total to find out how much you owe.

Call the Company You Owe

Before you figure out how to pay, you may want to make some calls to see which companies might be willing to work with you.

Be honest. Let them know your situation and ask them if they can offer you either an extension or some sort of flexible payment plan. In my experience, most will want to help, as they understand that things happen and there are times when you can’t cover your bill. In most instances they would rather help you out than lose you as a customer.

Once you have negotiated the new terms, make sure it is all in writing, either in an email or in something sent to you by regular mail.

Find Ways to Make More Money

The truth is if you have too many bills and not enough money to cover them, you need more money. Take a look around the house to see if there are things you can sell. It might be an old piece of furniture, baby items or even toys.

You might also see if there is a way you can make additional cash. It might mean a second job or using your skills in a side gig. If you are a teacher, maybe you could tutor people in your specialty subject. You might consider lawn work, baking, babysitting — the possibilities are endless. (Here are some work from home ideas to get you started.)

Prioritize Payments

If you’ve done all of the above and find that you are still unable to cover your expenses, then you will need to determine who to pay right now and which bills will have to wait.

In many cases, the most important bills to pay first are your utilities, such as electric, water and gas. These are often necessary to maintain your health and other aspects of your daily life.

Once those bills are paid, the next ones you need to consider are secured debts. These include vehicle loans and your mortgage. Since there is collateral on these loans, it means creditors can take back the property if you don’t pay. You’ll need a car to get to work and make the money to pay your bills, after all. In order to avoid a repossession or foreclosure, it is very important that you pay these loans.

The final bills to pay are items such as your student loans, credit card and other debts. Be aware that not paying these on time will likely hurt your credit, but there are things you can always do later to repair credit damage and build your scores back up. It’s a good idea to keep track of how your credit fares throughout this process, and you can get a free credit report summary every 30 days on Credit.com to do just that.

Create a New Plan

Chances are you hated this situation and want to do what you can to prevent it from happening again. This means you need a plan. And, by plan, I mean you need a budget. Not just a random piece of paper with a list of bills, but an actual planned and written budget.

Hopefully, these tips will help you get back on track with your finances. Remember that not paying your bills is not the worst thing that can happen to you. Sure, it feels like it in that moment — and it can have seriously negative consequences — but in the grand scheme of things, there are worse things that could happen to you.

Know that you are not alone, you can recover and you can make a plan to prevent it from happening again.

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