Behind on your bills? Here’s what to pay first


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When you’re struggling to make ends meet, bills like a mortgage, auto loan, credit card and more can pile up. It’s easy to lose sight of financial priorities when you’re facing such hardship.

But some debts have more severe consequences if you can’t pay, while others may fall lower on the priority list. When you can’t pay all your bills, it makes sense to prioritize the most important ones. Find out which debts are most crucial to pay each month and what to do when you can’t pay your bills.

High-priority bills that are the most important to pay each month

Bills that you should prioritize each month
What happens when you don’t pay?
Auto loan and auto insurance
  • You’ll be charged a late payment fee
  • After one billing cycle of non-payment, your credit score will take a hit
  • The lender can repossess your car, in some states as soon as you default on your loan
Mortgage or rent payments
  • After 15 days of non-payment, you’ll be charged a late payment fee
  • After 30 days, your credit score may take a hit
  • After 120 days, your lender may begin the foreclosure process
  • If renting, your landlord can evict you, with the time frame depending on local laws
  • Utility companies can disconnect your power, water or gas
  • If your account is charged-off or sent to collections, your credit will take a hit
Court-ordered debts
  • Depending on the type of debt you owe, debt collectors may be able to garnish your wages
  • Failing to pay court-ordered debts may also be punishable by jail time

Auto loan and auto insurance

If you default on your auto loan for a series of payments, your creditor can repossess your car. This can be devastating if you need your car to get to work or to go to the grocery store. And if you don’t pay your auto insurance premium, you could end up losing your insurance coverage. It’s both illegal and a liability to drive without insurance.

Auto loan borrowers who think they may have trouble making their payments should get in touch with their auto loan lender and insurance provider to see what relief programs are available. The lender may be willing to adjust your payment due date, put you on a payment plan or grant you a payment extension.

For those affected by the coronavirus… Many auto loan lenders are offering hardship programs to eligible borrowers who are affected by the coronavirus pandemic. Such programs include deferred payments, payment plans, penalty fee waivers and payment due date adjustments.

Mortgage or rent payments

During an emergency, the most important thing to do is ensure you have all the necessities covered: food, water and shelter. If you’re a renter who doesn’t make your rent payments, you could be evicted. If you own your own home and you can’t pay your mortgage, you could face foreclosure and lose your home.

Homeowners who are going through financial hardship should get in touch with their mortgage lender to see what programs are available, including forbearance, modification and refinancing. If you can’t pay your rent, try to negotiate a late payment with your landlord in writing. You can offer to pay some of the rent on time and the rest at a later date in the month, but you may have to pay a late fee.

It’s important that you pay your renter’s insurance or homeowner’s insurance premium each month. If you don’t, you could be on the hook for any damages that occur while you are the leasee or while you own the home. But you could reduce your coverage or shop around for a cheaper policy if you can’t afford to make the payment.

For those affected by the coronavirus… During the coronavirus pandemic, homeowners and some renters are protected by the Coronavirus Aid, Relief and Economic Security (CARES) Act. The legislation includes the following:

  • 60-day moratorium on foreclosures
  • Guidelines on mortgage forbearance
  • 120-day moratorium on evictions for tenants renting from a landlord with a federally backed mortgage

Many states have also suspended eviction and foreclosure proceedings. Plus, many lenders are offering coronavirus-specific hardship programs.

Utilities such as water, gas and electricity

Utilities don’t just make your home comfortable, they make it habitable. Without water or heat, you and your family could find yourselves in a dire situation. If you don’t pay your utility bills, the individual providers may cut off service within a matter of days or weeks.

If you’re having a hard time keeping up with your utility payments, you may qualify for relief. Get in touch with your utility companies to see what programs are available, such as reduced rates and energy savings programs. You may also qualify for a payment assistance program, such as the Low Income Home Energy Assistance Program offered by the federal government.

For those affected by the coronavirus… Congress has demanded that utility companies halt shut-offs during the COVID-19 outbreak, although there has been no federal legislation requiring companies to comply yet. While companies in many states have obliged, there are reports of utility companies in some towns continuing with shut-offs.

Court-ordered debts like child support

Parents who owe child support are legally obligated to keep making payments. If you don’t pay, the Office of Child Support Enforcement can withhold your income and retirement, set liens on your property, intercept a tax refund and levy your bank accounts.

Failing to pay court-ordered debts can result in wage garnishment, bank account seizure, property seizure and even imprisonment. Other court-ordered debts include court judgment debt (including when a creditor sues you over a debt, and criminal justice debt (including court fees and fines associated with a criminal charge).

For those affected by the coronavirus… Your entire Economic Impact Payment, the one-time $1,200 stimulus payment offered to many American taxpayers with Social Security numbers, can be garnished to repay your child support debt. There are no exceptions for financial hardship.

Debt collection has not stopped due to the coronavirus, and your creditors may still garnish your wages and even your stimulus check during this time.

Debts that are a lower priority if you’re struggling

Bills that can be a lower priority
What happens when you don’t pay?
Credit cards
  • Once your credit card bill is 30 days past due, your credit card issuer can report you to the credit bureaus
  • You may be charged a penalty APR and late fees
  • The credit card issuer may file a lawsuit to try to recoup some of the debt
Medical debt
  • After 60 days, a hospital may send your bill to a collection agency
  • If your medical bill is 180 days late, the debt can affect your credit score
Student loans
  • If your federal student loan account is delinquent for 90 days, the lender may report you to the credit bureaus, which will lower your credit score
  • If you don’t make your payments after 270 days, your student loan goes into default. The lender can garnish your wages and take you to court, among other consequences
Personal loans
  • Within 30 to 60 days, your lender may send you a letter of default, charge you a late fee and report you to the credit bureaus, which will lower your credit score
  • After 90 days, the lender may prepare to take you to court or try to settle your debt
Cable bill and other subscriptions
  • Instead of letting your account go into default and risk a hit to your credit score, it’s best to cancel subscriptions that you don’t need

Credit cards

Unless you are successfully sued over your debt, your creditor cannot garnish your wages or seize bank accounts and property for unpaid credit card bills. This means that without a court-ordered judgment, your credit card company can’t really do much since it doesn’t have any collateral ー unless you have a secured credit card. (If your creditor has successfully sued you, however, then you’ll need to adhere to the court-ordered debts guidance above.)

Missed payments on your credit card will hurt your credit. To keep your account in good standing, try to make the minimum payment at least. Get in touch with your creditor to ask if they can temporarily lower your minimum monthly payment.

For those affected by the coronavirus… Many credit card issuers are offering relief to customers who are affected by the pandemic. Relief comes in the form of payment deferrals, extensions and even waived late fees. An April 2020 LendingTree survey found that 91% of cardholders who asked their issuer for a break due to the coronavirus were able to get relief.

Medical debt

Payments due to hospitals and doctors’ offices fall relatively low on the priority list. That’s because you have months before your medical debt affects your credit rating, and medical debt is unlikely to carry high interest rates. Medical debt doesn’t result in seizure of property like delinquencies on an auto loan or a mortgage, unless you are successfully sued.

Plus, there are a few ways to negotiate medical debt through the hospital’s billing department. You may be able to:

  • Lower the overall balance owed
  • Pay through an interest-free payment plan
  • Check the itemized bill for errors
  • Enroll in a hospital’s payment assistance program, if eligible

If a medical care provider has already successfully sued you over debt, then refer to the above section on court-ordered debts.

For those affected by the coronavirus… Americans who have been sued over medical debt are still obligated to make those payments or face legal repercussions. The CARES Act does not offer any special provisions for those who owe medical debt.

Student loans

Federal student loan borrowers may qualify for an income-driven repayment (IDR) plan that sets your monthly payment based on their current income and family size. Borrowers may not be required to pay any amount if their income is low enough.

If IDR isn’t an option, you still don’t need to prioritize this debt over more important bills like rental payments, at least not right away. Federal student loans aren’t in default until you’ve missed nine months of payments, though your credit will take a significant hit. At the end of that nine-month period, borrowers risk wage garnishment, seizure of tax refunds and seizure of other federal benefits like Social Security.

Private student loans also fall low on the priority list, as they typically do not require collateral, so you don’t risk losing any assets if you default. However, your credit score will suffer if you don’t make payments. Get in touch with your lender if you’re having difficulty with your private student loan payments.

For those affected by the coronavirus… As part of the CARES Act, all federal student loan payments and interest charges have been suspended through Sept. 30 for loans through the Department of Education, though that is not the case for private student loans. Many private lenders are, however, offering their own hardship programs that may include suspension of payments and forbearance, for example.

Personal loans

Personal loans are typically unsecured, which means they don’t require collateral. If you can’t make your personal loan payment, you don’t risk losing any physical assets, like your car or home. You do risk ruining your credit, though. Within a few statement cycles of nonpayment, your lender may assess a late payment fee, send you a letter of default and report you to the credit bureaus. After 90 days, your lender may prepare to take you to court.

Let your lender know if you can’t make the payment. Personal loan lenders sometimes offer hardship assistance programs including loan modification, forbearance and payment plans.

For those affected by the coronavirus… Many personal loan lenders are offering hardship assistance programs for borrowers who have been affected by the coronavirus pandemic. Select lenders have waived late fees and postponed payments, among other things.

Cable bill and other subscriptions

In times of dire need, it’s best to cancel your nonessential utility bills. This includes cable, streaming services like Netflix and other monthly subscriptions that you could do without temporarily. Many of these services offer free cancellation, making it simple to reduce your monthly spending.

Get in touch with your internet provider to see if they can work with you for some type of hardship assistance or a low-income internet plan. If you need to suspend your internet services, take advantage of your local library for free internet access.

For those affected by the coronavirus… Some internet service providers, including AT&T and Comcast, have stopped disconnecting service for customers who have been affected by the coronavirus. They have also temporarily suspended late fees and opened up public Wi-Fi hotspots.

What happens when you don’t pay your bills

When you open a new credit card or loan, you enter a legally binding contract with your financial institution. If you can’t fulfill your side of the deal, your creditor or lender may take action.

Here’s what could happen if you don’t pay your bills:

  • You may be charged a late fee. This is typically the first action that’s taken when you are delinquent on a credit card payment, loan payment or another bill.
  • Your service may be disconnected. For example, your internet service provider or phone company may stop service to your account.
  • You may suffer a blemish on your credit report. Late payments can last on your credit report for up to seven years.
  • Your assets may be seized. If you have a secured loan or credit card, then the lender may seize any assets you put up as collateral, such as your car, home or bank account funds.
  • You may be taken to court. If a financial institution can’t get their payment by other means, they may turn to litigation.

You may qualify for assistance through your financial institution, so contact them as soon as you think you’ll miss a payment. When you can’t pay your bills, it may seem counterintuitive, but it’s important to reach out to your creditors right away. They may be able to waive late fees, defer payments or put you on a payment plan.

Beware: Your stimulus check can be seized over unpaid debts. In April, the government started depositing Economic Impact Payments into eligible taxpayers’ bank accounts as part of the CARES Act. Depending on where you live, debt collectors may be able to garnish your stimulus check. Some states, including New York, have blocked financial institutions from seizing stimulus payments.

This article originally appeared on and was syndicated by

17 smart ways to cut your utility bills

Tired of paying what feels like way too much for your utilities? Use these money-saving tips to lower your bills today.

Few bills are as unpredictable as utility bills. You may not think you’ve changed your consumption habits from one month to the next, but your utility bills tell you otherwise. Between turning the lights on when you wake up, taking a hot shower, washing dishes and all the other countless daily habits, it feels almost impossible to avoid racking up your utility bills each month.

If you’re looking for ideas on how to save money on utilities, you’ll be happy to know you don’t have to resort to candlelight and infrequent showers to make it happen. We’ve put together a list of ideas so you can learn the different and easy ways to lower your bills.

Here’s our list of 17 ways to save cash on utilities (plus a bonus money-saving tip).

Related: You’re probably overspending on these 6 monthly bills


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A programmable thermostat allows you to automatically regulate your home heating and air conditioning. Programmable thermostats can save numerous temperature settings for each day, and allows you to create a recurring schedule for when and at what temperature your heating and air conditioning system runs. Some newer smart thermostats will also communicate via Wi-Fi and even account for outdoor weather.

According to the U.S. Department of Energy, you can save as much as 10% a year on heating and cooling by raising the temperature in your home by up to 10 degrees while you’re out of the house. So you might set a programmable thermostat to maintain a temperature of 75 degrees during the summer when you’re home and 85 degrees anytime you’re away. You can follow the same strategy during winter months by setting the thermostat to 70 degrees while you’re home and lower while you’re asleep or out of the house.

You can set up zones in your house to optimize the temperature throughout. This is especially helpful in two-story homes because of rising heat. Having one programmable thermostat downstairs and another upstairs to heat or cool specific areas will help improve energy efficiency while maintaining comfort levels in your home.

You can also do this manually by shutting vents and doors to certain rooms that don’t need to be heated or cooled. If parts of your house are unoccupied, there’s no sense in wasting energy to keep the temperature in these rooms at the most comfortable levels.

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Weatherstripping doors and windows in your home can stop the air from leaking out of your house. Sealing cracks and air leaks, especially in an old and drafty house, can save you more than 20% on your heating and cooling bills, according to the Energy Department.

Weatherstripping comes in a variety of materials, with some more cost-effective than others. As you’re shopping for weatherstripping, choose products that will best withstand weather, temperature changes and normal wear and tear.

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Ceiling fans circulate air in the room to create a draft throughout. Although a ceiling fan doesn’t alter the temperature, it creates a wind-chill effect that will help keep you comfortable. Because of the cooling effect, ceiling fans may allow you to raise the thermostat setting by a few degrees without sacrificing your comfort.

When shopping for a ceiling fan, look for an Energy Star certified model. On average, a ceiling fan that earned the Energy Star label circulates air 20% more efficiently than a standard model.

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During summer months, a majority of the sunlight that hits standard double-pane windows makes its way inside as heat. Window treatments that block sunlight prevent that heat from entering, which then helps reduce the energy needed to cool your home.

Energy-saving window treatments can include shades, blinds, curtains and shutters. Window films can also be applied to the glass to block solar heat from penetrating. With this much variety, you can choose window treatments that save energy while also fitting the style of your home.

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You can reduce the amount of energy it takes to cool your home during the summer by avoiding using appliances that generate large amounts of heat, such as your oven. Instead, consider cooking the majority of your meals outside. You can take the traditional summer approach of cooking on a grill or use a portable propane or electric burner.

The opposite is true for winter months. If you do all your cooking indoors, the extra heat from the oven can help heat your home.


You can implement all the aforementioned energy-saving tips, but if your heating system and/or air conditioner are old and inefficient, you won’t see as much savings as you could. Replacing your older system with an energy-efficient model will be an investment, but you will see more savings in the long run.

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You may feel like you’ve reduced your energy usage as much as possible. Is there anything else you can do to lower your electric bill? Or maybe you want to move away from fossil fuels and use cleaner energy like solar or wind, but your current provider charges more for that. If that sounds like your situation, consider using Arcadia.

Whether you rent or own, connecting your utility account to Arcadia could lower your power bill while also giving you access to clean energy. After you sign up, Arcadia will match you with a new energy provider and work to lower your rates. It’s free to join, so lowering your bill will really cost you less.

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If your water heater is warm to the touch, it’s possible this heat loss is costing you money. Whether you’re running on gas or electric, you’re using more to keep reheating that water. But just like insulating your walls, insulating your water heater can help reduce heating and cooling costs each month.

A newer model hot water heater will likely already be insulated, but an older heater might not be. According to the Energy Department, your water heater should have insulation with an R-value (thermal resistance) of at least 24. If it doesn’t, consider adding extra insulation to your water tank.

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If you’ve tried all the ways to save money in the laundry room such as washing with cold water instead of hot water, using a lower heat setting on the dryer and not overfilling your dryer with clothes, you may consider ditching the dryer altogether and opting to air dry your clothes instead.

On top of saving you money, you’ll better preserve your clothes. Although convenient, dryers weaken the fabric’s fibers and they end up in your lint catcher, and then your clothes eventually come apart and end up in the trash. Therefore, hanging your clothes out to dry will save you money in multiple ways.

Ramon Portelli

Swapping out traditional incandescent light bulbs for energy-efficient lighting is one of the easiest ways to cut your energy bills. 90% of the energy produced by incandescent light bulbs is given off as heat, which means you’re essentially throwing away money every time you turn on the switch.

Thanks to modern technology, we can now swap those old bulbs for energy-efficient halogen incandescent, CFL, and LED bulbs. Although the initial price of these bulbs will be higher, they not only consume less energy, but they also last much longer than a traditional incandescent bulb.

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Although you may think simply turning off electronics that are plugged in stops their energy consumption, it doesn’t. Electronics that are turned off can continue to use energy. This continued use of electricity is known as standby power, leaking energy, or vampire loads.

But a smart power strip can detect when electronics and appliances go into standby mode and cut off these vampire loads. Just be sure to read the details when you shop for new power strips, because not all of them are smart, and the regular ones won’t save you money. And of course, this is all much simpler than unplugging your electronics all the time.

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When you purchase a new appliance, you have to consider both of its price tags: the purchase price and the cost of operation. Although energy-efficient appliances may sometimes have a larger price tag, they pay for themselves over time by helping you save money on reduced energy use.

Whether it’s a dishwasher, washing machine, dryer, refrigerator, or any other appliance, swapping out old appliances for new, Energy Star labeled ones could go a long way in helping reduce your energy costs.

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If you think you’re using less water by hand washing the dishes, you’re wasting more than just time. An Energy Star labeled dishwasher can save you more than 7,000 gallons of water a year over hand washing.

You can make the most efficient use out of your dishwasher by running it only when you’ve accumulated enough dirty dishes for a full load. Running the dishwasher only when it’s full can prevent 100 pounds of carbon pollution and save $40 a year on your energy bill.

Older toilets can use more than 6 gallons of water each time they’re flushed compared to the one or two gallons per flush of modern, low-flush toilets. If you have an older toilet, it could be the greatest source of wasted water in your home.

Newer toilets that carry the WaterSense label are independently certified and must meet rigorous criteria for both performance and efficiency. Replacing old, inefficient toilets with a WaterSense labeled model can reduce water usage by nearly 13,000 gallons every year.


Although federal regulations require newer-model showerheads and faucets not to exceed more than 2 1/2 gallons per minute at a water pressure of 80 pounds per square inch, you can buy water-saving fixtures that reduce your consumption even more.

Quality, low-flow showerheads shouldn’t run you more than $20 each and could result in savings on your water bill of 25% to 60%. For maximum water-efficiency, look for an aerator for your faucets that restrict flow rates to no more than 1.0 GPM.

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Swapping out old, inefficient appliances for new, water-efficient appliances may be the best way to reduce the amount of water you use. If you don’t want to spend a large amount of money at once, you might formulate a plan to replace one appliance at a time. 

There are also zero-interest credit cards that are great credit cards for making large purchases. You essentially get free financing and at least a year of time to pay off your money-saving appliances.

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Consider paying your utility bills with a credit card. Many different types of utility companies allow this now, and if you use one of the best cashback credit cards or best travel credit cards, you could earn money or rewards just for paying your monthly bills. If you’re not paying with a rewards credit card, you’re essentially paying too much for your utilities.


Although your utility bills will fluctuate according to your usage, you can save money on utilities by implementing these cost-cutting tips. Although the upfront cost of replacing older, inefficient appliances or heating and cooling systems with energy-efficient models might be expensive, they will pay for themselves over time.

And once you start saving on these utility costs, don’t stop there. The next areas to focus your attention on are lowering your internet bill and lowering your phone bill.

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This article originally appeared on and was syndicated by


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