How Not to Pay Your Bills

HOW TO NOT PAY YOUR BILLS

We are going to teach you how to not be a deadbeat when it comes to paying your bills.

It's a tutorial in how to minimize the destruction when you are unable to pay all your bills. Not paying bills is one of those things that hurt your credit.

Most articles offering information about coping with debt presume that you are in possession of the funds to pay the majority if not all of your bills. However, as we all know, that is usually not the situation. Most people suffer from poor planning, poor decision making, terrible luck or even a mixture of all of the above...which equates to not having the money you need.

Bankruptcy?
Succumbing to bankruptcy is unfortunately the end result for many, but should be avoided if possible. If you feel that your bills are not that colossal or you think that your financial well-being is going to get brighter, filing bankruptcy is an extreme reaction. It is also possible that you an intense dislike for dodging your creditors -- even if you are unable to pay them right now. Is bankruptcy good or bad?

During times like that, it can be beneficial to put together a plan or develop a budget that will allow you to create some time/breathing room. This should allow you can come up with a strategy to get yourself and your financial situation in a better situation while minimizing the damage.

Don't Ignore Your Debt Problems
Regrettably, most consumers in financial distress merely pull the wool over their eyes, rejecting to acknowledge their issues which ultimately makes matters worse. For example, they pay a utility bill when the mortgage is due purely because the are receiving pressure from a collector. Or, they discontinue paying all of their bills because they are unable to pay all of them.

Recognizing what bills need to be paid and which can be put off -- and for what period of time -- is important for your financial endurance.

Understanding the Damage
Your credit score is going to be damaged from any late payment you make. Lenders utilize your the three-digit credit score to weigh your credit-value. Learn more about FICO scores and how credit scores are computed. Your credit score is very susceptible to 'lates', though typically you need be more than 30 days delinquent in order for creditors to report your negative activity to the credit bureaus. The more accounts you are late on and the longer time you are late, the more impacted your score is going to be. This damage can leave its bearing for several years, but it is not everlasting. The moment you get back on track, you can start the process of rebuilding your credit.

It is possible that some of your late payments are going to have a greater impact than others. For example, if you neglect to pay your rent, your landlord has the right to begin the steps of having your evicted....which will mean you can be out on the street in a few weeks time. Auto loan and mortgage lenders are also very volatile. However, credit card companies, student-loan lenders and cell phone providers typically will wait several months prior to taking your accounts into collection.

Understanding the consequences of not paying your bills will help you set-up priorities. Bills that are considered vital are your mortgage or rent, all of your utilities (i.e. heat, electric, water), food and anything that enables you to accomplish work (car loans, day care). However, cell phones, cable and Internet service are not services you need to survive and therefore are bills that you can stall paying if needed. Learn more about fixed expenses vs. discretionary expenses.

Related Reading:
How to Track Bill Payments Using a Spreadsheet Program or Paper - Ehow provides great info on how to track your bill payments.
How to Negotiate Out of Debt
Paying Medical Bills
Organizing Bills

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