How To Catch Up on Late Payments

a man working on his finances
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If you have gotten behind on bills, you may be wondering what you can do to fix the situation. It can be difficult to pull yourself out of a negative spiral. When you are behind, it is often because you just do not make enough money to cover your expenses and handle emergencies. It is possible to recover from these situations. You will need to focus and cut unnecessary spending until you are caught up.

Make a List of Bills You Are Behind On

You need to sit down and make a list of what bills you are behind on and what you need to bring those bills current. You should also have your current budget on hand. If you do not have a budget, you need to make one now. 

Prioritize the Bills

Prioritize the bills. You should go in order of your mortgage/rent, then utility bills, and then other bills in order of amount or interest rate or lateness. It is important that you make sure that you have a place to stay, electricity and running water. This is why the rent and utilities should come first. After that, you should stay current on your car payment.​

Additionally, if you have to choose which bills to pay, always pay those bills first. In this type of situation, your credit cards are your last priority. If you get behind on your credit cards, it may affect your credit, but you will still have a safe place to stay and a way to take care of yourself. If you get behind on your rent and utilities, it will still affect your credit, but it can affect whether or not you can take care of yourself. 

Find the Money to Get Caught Up

Determine how much extra money you have available to get caught up each month. When you are trying to get caught up on bills you need to stop all unnecessary spending. This includes going out to eat, going to the movies, and other forms of entertainment. You can also suspend your cable or other unnecessary monthly expenses until you are caught up. You may also want to consider selling some things that you are no longer using in order to raise money quickly and to help you get caught up.

Talk to Your Creditors to Set Up a Plan

Once you have determined how much you have available you should call and talk to your creditors or anyone that you are behind with. Many companies will be able to work out a payment plan with you, in order to help you get caught up. In fact, you should try calling if you are afraid that you are going to fall behind. There is a lot that they can do to help if you communicate with them.

Look for a Second Job

You may need to take on a second job for a short time so that you can get caught up. This can be very temporary, but it can help you to clear up the mess and help you to get control of your finances. You may also consider selling things on e-Bay in order to raise money quickly. You may want to consider these part-time jobs that pay better than minimum wage. Be sure that all of the extra money you are earing is going directly toward getting caught up.

Start Saving for an Emergency

Once you have gotten current on everything, you should begin to save money for an emergency fund, to prevent this from happening again. You should also begin to look for long-term solutions for your income crisis. You may consider looking for a higher paying job or enrolling in a program or school so that you are qualified for higher paying work.

Keep to a Monthly Budget

To prevent this from happening, you should have a written monthly budget and you need to stick to it. You should pay particularly close attention to your variable expenses. You may be able to cut back in areas without feeling like you are.

Communicate With Your Creditors

Communicate with your creditors and utility companies as soon as you realize that you may be late or miss payments. They can often delay a payment, stop interest for a short period of time or note in the records that you have communicated the problem.

Prioritize Your Payments

Remember that your credit card payments should be one of the lowest things when it comes to prioritizing on what payments you may be late on. You need to pay them, but it is more important to have a place to live and power. When you are short on cash, you need to work to pay off the most important things first and cut out any extra spending you may have.

Bottom Line

Catching up on late payments should be one of your first steps when you are starting to clean up your finances. You can make real changes to your financial picture with discipline and hard work. It is important to start taking steps so that you are not just surviving but thriving financially. Look at your entire financial picture and get serious about budgeting to see what else you need to do to change the situation.