Behind on bills? 4 ways to catch up


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Are you juggling utility shut-off notices while fielding calls about overdue payments from creditors or collection agencies? If so, you’re not alone. About 30 percent of households across all income levels have difficulty paying their bills, according to a survey by Rand Corporation, a research organization.

Households earning less than $25,000 a year struggle most (52 percent), and 27 percent of households earning from $25,000 to $124,000 annually have difficulties getting by. But even 11 percent of households with an annual income of $125,000 or more surveyed say they have difficulty paying bills.

If you’ve fallen behind on bills, don’t give up. You can start digging your way out of this financial situation right now by taking these four steps.

1. Take an honest look at your financial situation

Before you can catch up on past-due bills, you need to know exactly what you’re up against. As frightening as it may be to add up the scary total of what you owe, once you get it all down on paper or a spreadsheet, you’ll have the basic information you need to come up with a catch-up plan.

Make a list of all monthly payment due dates and amounts. Take a close look at which payments you missed, paid late or consistently have trouble paying on time. Once you have all the information organized, you can come up with a plan to get caught up.

Find out: Don’t Fall for These 5 Collection Agency Tricks

2. Set payment priorities

When facing a lot of overdue bills, prioritizing payments can seem overwhelming. However, once you break it all down, it should become clear which bills should be at the top of your priority list, such as basic survival skills like rent or mortgage payments, food and utilities. If you’re having trouble paying your mortgage, contact a HUD-approved counselor for help avoiding foreclosure. Check with your municipality for city or county programs that may be available to help you avoid foreclosure or catch up on back rent.

After basic survival expenses are covered, focus on car payments so you can still get back and forth to work. Are you behind on loan payments, credit cards or other debts? If so, contact your creditors, explain the situation and ask if you can work out a payment plan to catch up on past-due amounts.

Find out: Facing Foreclosure? It May Not Be Too Late to Halt the Process

3. Create a budget

Once you know what your payment or repayment priorities are and where you stand with your creditors, it’s time to sit down and put together a monthly budget. If you’ve never created a budget, don’t worry. There are plenty of resources available to help you put together a budget that works for you. Here are a few suggestions to help you get started.

Meet with a credit counselor

Meet with a credit counselor at a nonprofit credit counseling agency. A credit counselor can assist with creating a monthly budget and a short-term or long-term debt repayment plan. Nonprofit credit counseling agencies also typically provide help with working out a repayment plan with creditors and charge either no fee or a nominal fee for their services.

Download a budgeting app

The days of having to sit down and scratch out a monthly budget with pencil and paper are long gone, but if that’s what you prefer, go for it. However, many people prepare their budgets by downloading a budgeting app such as Mint or You Need a Budget (YNAB). Many budgeting apps allow you to sync bank accounts and keep track of spending and financial goals. Many also offer suggestions on budgeting and send reminders of payment due dates.

Tap online resources

With hundreds of personal finance websites out there, you’ll find no shortage of articles that outline basic steps and offer tips on creating a budget. If you prefer a more hands-on structure, you’ll also find plenty of budgeting templates and spreadsheets online to organize your monthly bills and repayment plan.

4. Increase your income

Nobody looks forward to clocking out from one job and heading to another. However, increasing your income by taking a second job temporarily is one of the best ways to catch up on bills. While working two jobs isn’t ideal, remind yourself that the extra job is short-term. Also, don’t restrict yourself to only the most tedious jobs you see in online ads.

If you like animals, maybe you could pet sit. If you have a particular interest or hobby, consider working at a part-time job related to your passion. Another way to increase your income is to find a better-paying, full-time job that allows you to cover the bills and even set money aside in an emergency fund, so you don’t fall behind on bills again.

Bottom line

The key to recovering from falling behind on bills is organization and a solid repayment and/or catch-up plan. Once you have those components in place, you’ll be well on your way to catching up and gaining more control over your finances so you can avoid falling behind again.


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