What to Do if You’re Falling Behind on Your Bills
This article originally appeared on The Street
The financial fallout of Covid-19 has had a significant impact on the ability of consumers to pay their bills on time.
More than half—57%—of Americans report a reduction of income throughout the pandemic. Nearly half of consumers have skipped paying one or more bills, according to a 2020 survey conducted by doxo, a web and mobile bill pay service.
Auto loan payments top the list with utility and cable/internet bills a close second and third. One in five Americans have skipped a rent payment, while 17% have skipped a mortgage payment.
Three quarters of those surveyed are worried about their financial future, down just slightly from when the pandemic first hit.
“With no end in sight for economic recovery, we’re seeing that consumers remain not only worried about their ongoing ability to pay bills, but how the pandemic will impact their future financial health,” said Jim Kreyenhagen, vice president of marketing and consumer services at doxo.
What to Do if You’re Falling Behind on Bills
With auto loans at the top of the list, don’t put yourself in the position of having your car repossessed. Reducing other bills can help you come up with the payment.
If you know you are going to be late on a bill, contact the creditor or company in advance. Explain the situation and ask to set up a delayed payment without interest or penalty. Present a realistic plan for when you will be able to make your payment.
Companies will be more responsive if you are proactive instead of waiting until after you skip a payment.
Avoid being late on a credit card payment at all costs. The interest and fees can be extreme. At the very least, make the minimum payment by the due date. If you are going to miss a payment, call them in advance. Ask for a delay of the due date and make sure it is there on time.
If you have already missed a bill payment, immediately contact the company and work out a payment plan. Ask for any fees to be removed. Get the name and information of the person you spoke with, for future reference. Try to get a confirmation email with the repayment terms, or at the very least a confirmation number for your conversation.
Reduce your bills: For cable and internet bills, consider cutting back on your add-on services until finances pick up again. Talk to your provider to see if you could renegotiate your terms if you recommit for a certain period of time. Consider switching providers and let your current provider know you are considering leaving to take advantage of a new customer offer. It costs them more money to try to get a new customer than it does to retain your business, so see what they will do to keep your business.
For utility bills, contact your service provider. There are several things you can do to save money on your energy bill. Even turning down your thermostat this winter by one degree saves you money. It’s amazing the simple things that can be done to lower energy costs. Each utility provider is different, so check your providers website for specific energy and moneysaving tips.
Monitor your credit: Stay on top of your credit report. Consumers can get one free credit report from each of the three reporting agencies every year. Many people order one report every four months. Go to annualcreditreport.com to get your copies. If you find marks against your credit, contact the creditor and talk to them about resolving and removing their complaint. If you find a discrepancy, you can work to correct that immediately so there is no impact on your credit score.