Can’t Pay Your Bills? What to Do, Step by Step
Last updated: October 27, 2026 by the TCA Financial Editorial Team. This guide was first written during the 2020 coronavirus pandemic; the pandemic-era relief programs it described have ended, so it has been updated for anyone who cannot pay their bills after a job loss, illness or other hardship.
Losing income, a medical emergency or a sudden big expense can leave you unable to pay every bill on time. Ignoring the problem usually makes it more expensive: late fees, shut-off notices and damage to your credit pile up quickly. The good news is that most companies have hardship options, and free help is available. Here is what to do, step by step.
Quick checklist
- Make an emergency budget
- Protect housing, utilities, food and transportation first
- Call utility and phone providers before the due date
- Contact lenders and card issuers about hardship options
- Look for local and government assistance
- Get free advice from a nonprofit credit counselor
- Consider consolidation only if it lowers your cost
1. Make an emergency budget
List the money you still have coming in and every bill with its amount and due date. Cut or pause anything optional for now, such as streaming services, subscriptions and memberships. The goal is a short-term plan that shows exactly how much you can pay and where the gap is.
2. Protect the essentials first
When you cannot pay everything, put housing, utilities, food, medicine and the transportation you need to get to work at the top of the list. Unsecured debts such as credit cards usually come after these, though you should still contact those companies (step 4).
3. Call utility and phone providers before the due date
Many electric, gas, water, internet and phone companies offer payment plans, due date changes or hardship programs, and some states limit shut-offs in certain seasons or for medical needs. These options usually have to be requested, so call as soon as you know you will be short. Ask whether the relief pauses or only delays the bill, and what the payments will be when it ends. Paying something each month keeps the balance from growing.
4. Contact lenders and card issuers about hardship options
Banks, card issuers, auto lenders and mortgage servicers often have hardship programs such as a temporary lower payment, a skipped or deferred payment, or a lower interest rate for a period. Call before you miss a payment. Before you agree, ask:
- How long the relief lasts and what happens when it ends
- Whether interest keeps building during the relief
- Whether missed amounts are due all at once later
- How the account will be reported to the credit bureaus
Get the terms in writing. Staying in contact also helps protect your credit score. For federal student loans, ask your servicer about income-driven repayment, deferment or forbearance.
5. Look for local and government assistance
If you have lost your job, apply for unemployment insurance right away through your state. Dial 211 or visit 211.org to find local help with rent, utilities, food and other needs. Many states run energy bill assistance for lower-income households, and food banks and community action agencies can free up money for other bills.
6. Get free advice from a nonprofit credit counselor
Credit counseling organizations, usually nonprofits, can advise you on your money and debts, help with a budget, set up debt management plans and run money workshops, often for free or at low cost (CFPB). Under a debt management plan, you make one payment to the counseling organization and it pays your creditors, which typically lowers your monthly payments and interest; plans can include fees and usually cover only some debts, such as credit cards.
To find a counselor, the CFPB suggests starting with the Financial Counseling Association of America or the National Foundation for Credit Counseling, and checking an organization with your state attorney general and state consumer protection agency (CFPB). Be careful with debt settlement companies: they often charge expensive fees and may encourage you to stop paying your bills, which brings late fees, penalty interest and more collection activity.
7. Consider consolidation only if it lowers your cost
Taking on new credit during a hardship is risky, but if your credit is still in good shape, a consolidation loan at a lower rate can cut your payments and interest. For example, $10,000 of credit card debt at 17% paid over four years costs about $289 a month and about $3,850 in interest; at 8% the payment is about $244 a month and interest about $1,718. Consolidation only helps if you stop adding new charges to the cards you paid off. If your credit has already dropped, the rate you are offered may be too high for it to help, and a credit counselor may be the better first call.
Avoid covering bills with high-cost short-term loans where you can: a typical $15 fee per $100 borrowed for two weeks is an APR of about 391%.
Frequently asked questions
What should I do first if I can’t pay my bills?
Make a quick budget, protect housing, utilities and food, and call each company before the due date to ask about hardship options.
Will a hardship program hurt my credit?
It depends on the program and how the company reports it. Ask how the account will be reported before you agree, and get the terms in writing.
Is credit counseling free?
Many nonprofit counselors offer free or low-cost advice. Debt management plans may include setup and monthly fees, so ask for all costs in writing first.
This article is general information, not legal or financial advice. A nonprofit credit counselor or legal aid office can help with your situation.