Here’s what to do if you’re unable to make your monthly payment.
If you’ve recently found yourself struggling to pay a bill, you’re not alone. According to an April 2020 survey conducted by Regions Bank*:
- 76% of Americans are not very confident that their household can withstand an unexpected financial emergency.
- Approximately half of respondents say that if their household experienced a significant financial setback, their savings would last three months or less, and one-quarter say it would last less than a month.
Even a single missed payment can potentially have an impact on your credit score, but there are steps you can take to help prevent your financial health from snowballing downhill. Here’s what to do if you’re having trouble paying bills.
1. Determine What You Can Reasonably Pay
First things first: it’s important to have a clear understanding of how much you can afford to pay your creditors and when you’ll be able to do so. Now is a good time to revisit your monthly budget and make adjustments, particularly if you’ve lost a source of income. This step is incredibly important, as you’ll want to have a clear picture of your financial situation before speaking to any lenders. You may find that using a spending plan worksheet is particularly helpful during this time.
2. Contact Your Lender
When a bill hits and you realize you can’t pay, it can be tempting to brush the matter under the rug and ignore it. However, in situations like these, quick communication is key. Many lenders are willing to work with those who are facing hardship, and depending upon the type of debt you hold, they may offer payment programs or deferment options. Remember, be direct about your financial situation and what you can reasonably afford to pay — don’t agree to terms that you’ll be unable to meet.
3. Prioritize Your Bills
When money is exceptionally tight, some may find themselves having to prioritize which bills to pay first. For many, this means prioritizing debts that could cause hardship to your family if ignored, such as monthly rent or mortgage payment as well as essential utilities such as gas, water, and electricity.
If you can’t pay your rent on time, be sure to communicate with your landlord early and often. While the outcome will vary greatly depending on both your landlord and the laws in your area, many are willing to work with those who are facing hardship. If you’re unable to pay your rent for the foreseeable future, consider speaking to your landlord about alternative arrangements, such as subletting. It’s important to know that having an eviction on your record can make it difficult for you to secure housing in the future.
4. Regain Control of Your Situation
Remember that your emotional wellbeing is just as important as your financial health. For many, feeling like they’ve lost control of their financial situation may cause a wide range of emotions like anxiety or shame, potentially leading some to avoid dealing with their finances. However, avoidance will only cause the situation — and the associated emotions — to worsen. While it can be difficult to face, having a clear understanding of your financial situation won’t just make it easier for you to make informed decisions — it can also help you regain a sense of control over your circumstances, both financially and emotionally.
Finally, remember that it’s never too late to regain control of your finances. More often than not, your lender will be glad that you’ve reached out and will be eager to help you steer your account back into good standing. If you’re an existing Regions Bank customer experiencing financial hardship, know that we’re here to help you navigate your options. Learn more about mortgage and home equity assistance.
For more tips and tools to help you regain control of your finances, visit Regions Next Step.
*The Financially Fit Family omnibus survey questions were part of a national online survey that took place between April 1 – 5, 2020. It reached N=2,000 US adults, and the results are weighted and are representative of all US adults (aged 18+).
