Fidelity Smart MoneySM Playbook

How to help crisis-proof your life

What if I can't pay my bills?

Whether you’ve suddenly lost your income or you’re staring down a bill you don’t have the cash to pay, realizing you can’t cover an essential expense can be scary. Fortunately, there are resources and options to consider for expenses such as your rent, mortgage, and medical bills. Understanding your choices beforehand can help you prepare to navigate sticky situations when they arise. Even better, having an emergency fund of $1,000 or more stashed away can help provide a little cushion when unplanned costs pop up.

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Select all of the essential expenses you may be concerned about covering to learn some options to consider in a pinch.

Here’s what to if you can’t pay…

Select at least one of the options.

Which essential expenses are you worried about being able to afford?

Rent Mortgage Utilities Student loans Credit card bills Medical bills Taxes
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Rent

If you think you’ll be short on rent, find out your options as soon as possible.

Here’s who you could contact to help get control of your situation:

  • A free housing counselorOpens in a new window certified by the US Department of Housing and Urban Development (HUD) to help you better understand your lease agreement, tenant rights, and rent assistance options.
  • Your landlord (in writing) to ask about an extended deadline or other ideas.
  • A federal, state, local, or tribal rent assistance program for financial benefits or help negotiating a rent reduction.
  • Religious or secular charitable organizations for help covering payments.
Learn more about the steps you can take if you realize you can’t afford rent.

Mortgage

If you can’t pay your mortgage, it’s important to get organized and act fast.

Here are the actions you can take to find a solution:

  • Contact your lender ASAP to let them know you’re having trouble.
  • Find a free housing counselorOpens in a new window approved by the US Department of Housing and Urban Development (HUD) to help you apply for mortgage assistance.
  • Ask your lender about payment deferrals. Some allow up to 2 months of delayed payments to be added to the end of your mortgage term.
  • Set up a mortgage forbearance plan to submit lower payments for a certain amount of time.
  • Consider a loan modification through your lender to lower your monthly payments.
Learn what happens if you miss a payment and discover more about what to do if you can’t pay your mortgage.

Utilities

Utility bills can fall to the bottom of the priority list when other needs feel more pressing.

Here are the steps you can take if you know you can’t pay a utility bill:

  • Research your provider’s consequences, like late fees, loss of service, and reinstallation penalties, plus how not paying could affect your credit.
  • Contact your provider ASAP to negotiate a potential extension or repayment plan.
  • Apply for federal, state, or local utility bill assistance programs—for example, the federal Low Income Home Energy Assistance Program or the Lifeline program for phone and internet bills.
  • Take advantage of religious or secular charities and nonprofits for help with utility bills and other essentials such as groceries.
Discover more about your options if you can’t pay your bills today and learn 6 tips to lower future utility bills.

Student loans

After years of paused payments, many may struggle to fit student loan payments into their budgets.

The first step to creating a plan is knowing your options. If you can’t make a payment, you can:

  • See if you’re eligible for student loan assistance through your employer or through federal or state forgiveness programsOpens in a new window.
  • Contact your loan servicer to talk through ideas.
  • Change your repayment plan to something that fits your budget better or explore an income-driven repayment plan that’s based on your income and family size.
  • Ask your loan provider for deferment (temporary pause) or forbearance (pause or payment reduction).
  • Consider whether it makes sense to consolidate or refinance your loans for a lower interest rate or new repayment period to lower your payments.
Learn more about what to do if you can’t pay your student loans.

Credit card bills

Late on a credit card payment? Avoid a potential debt snowball.

Here are a few tips to help if you can’t pay your credit card bill:

  • Try to make at least the minimum payment to avoid late fees and hits to your credit score.
  • If you can, stop using your credit card to minimize future debt.
  • Call your credit issuer for a potential solution or to ask that a late fee be waived.
  • Explore nonprofit credit counselingOpens in a new window for help managing and negotiating your debt.
  • Try negotiating with your card issuer by asking for relief options, exploring a hardship forbearance program, or setting up a repayment plan.
For more ideas and considerations, check out this guide to tackling credit card debt when cash is tight.

Medical bills

Big medical bills for yourself or your family can come when you least expect them.

Don’t panic—create a plan to pay off those bills with these steps:

  • Request an itemized bill and review it carefully for accuracy. Dispute inaccuracies with your provider or insurance company.
  • Try to negotiate a lower bill or ask about bill relief programs with your provider.
  • Look for outside assistance through federal, state, local, and nonprofit organizations that may have funds for specific diseases.
  • Ask your provider for a medical bill payment plan to break a large bill into smaller parts (interest-free if possible).
  • Work with a patient advocate to help you understand your bill, spot overcharges, and negotiate with your provider or insurance company.

Discover more actions you can take if you can't pay a medical bill.

Taxes

Not paying your tax bill can cause big penalties if not addressed.

Here’s what to keep in mind if can’t pay your taxes:

  • Regardless of whether you file for an extension to submit your tax return later, any taxes you owe are still due on Tax Day in April, unless otherwise indicated by the IRS in the case of disaster relief.
  • If you can’t afford to pay the bill, still file on time to avoid the failure-to-file penalty, equal to 5% of your unpaid taxes for up to 5 months before maxing out.
  • Once you’ve filed, you can apply for a payment plan if eligible, which can help you reduce or avoid future penalties.
It’s no surprise: Taxes are complicated. Here’s more info on your options if you can’t pay your tax bill.

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