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What to do if you cannot pay a bill

We explain what you need to do if you can't afford to pay a bill.

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If your financial situation has taken a turn for the worst and you're struggling to pay the bills that come flooding through your door it can be tempting to put them in a draw and try to forget about them. However, needless to say, this isn't a good idea as it's simply going to make a lot more trouble for you later on.

So, to help you take control of your finances we explain exactly what you should do if you can't pay a bill....

1. Don't ignore the problem

If you're struggling to make a repayment, whether it's on your mortgage, credit card or another commitment, the worst thing you can do is to bury your head in the sand. Unfortunately, ignoring the issue won't make it go away. Instead, it's simply likely to make things a lot worse. Tackling the problem head on will enable you to find a solution that works for your current financial situation and will make you feel a whole lot better too.

2. Make contact

As soon as you know that you're going to have trouble paying a bill the best thing to do is to get in touch with the company that sent it to you. They're likely to be much more understanding if you're upfront and honest with them and may be willing to extend the amount of time you have to repay.

3. Prioritise

If you're struggling with money, food, shelter and heating should be given precedence over all of your other commitments, luxuries can wait until later. Consequently, meeting your mortgage or rent payments and any repayments for loans secured on your home should be your priority.

4. Budget

If you're finding it difficult to keep on top of your bills it's vital that you sit down and make a budget. This will help you to balance your essential outgoings with the amount of money you have coming in and is the key to taking control of your financial situation. It's really important to be honest with yourself when doing this as a good budget will give you a realistic picture of your finances and help you work out where exactly your money is going and how much you can afford to repay.

5. Keep paying

It's really important to pay as much as you can towards the 'problem' bill, even if you're unable to cover the whole amount. Making regular payments will help to show your creditor that you're committed to clearing the balance despite being in financial difficulty and again, may encourage them to be more sympathetic to your cause. Paying as much as you can will also help to reduce the total amount you owe and the amount of interest that will accrue on the outstanding balance.

6. Get help

There are a number of not-for-profit organisations that will be able to give you free, confidential advice on how best to tackle your debts and deal with your creditors. It's a really good idea to get in touch with one of these charities as soon as you realise you're going to struggle with a bill. Needless to say, companies that charge for their advice or promise an easy way out should be given a wide berth.

Those to try to include:

7. See where you can save

If you're in financial difficulty it's important to make sure that your money is working as hard as possible for you. Check that you're claiming all the benefits to which you're entitled, make sure that you have the best deal on your insurance and utilities and look at ways to reduce the amount you're spending each week. By paying attention to where your money's going it's relatively simple to make savings on everyday items and the less you spend, the more you'll be able to put towards clearing any outstanding debts.

8. Avoid the loan trap

Tempting as it can sound, taking out a new loan to cover bills that you're struggling to find the money for is rarely a good idea and definitely not a solution that's going to work over the long term. Seeking help from a qualified debt counsellor and taking the opportunity to sort out your finances is a much better approach that will ultimately help you to take control of your finances.