If you're having trouble paying your bills, you're not alone right now.
Nearly 10 million people in the U.S. have filed for unemployment in just two weeks, and many others have had their hours cut as a result of the coronavirus pandemic. And while I hate to say this, we’re probably still a ways off from realizing the true extent of this crisis.
And if you didn’t have your financial house in order before this hit, you might be completely exposed right now. This is a hard spot to find yourself in.
To help anyone who is having trouble paying bills, we’ve compiled a list of financial relief options. This includes both expanded government aid and other emergency relief options. We’ll keep updating this list as new options become available.
Finding help if you can’t pay your bills: 15+ options for financial relief
Current government resources
The U.S. government has rolled out several new opportunities for Americans whose finances have been affected by the coronavirus.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act that President Trump signed into law on March 27, 2020 is a $2 trillion package that includes expanded unemployment insurance. This expanded unemployment insurance includes:
- An additional $600 per week to each recipient for up to four months.
- Benefits for self-employed workers, independent contractors, gig economy workers, and those with a limited work history.
- States are incentivized to get rid of a “waiting week” that prevents laid-off workers from receiving benefits as soon as possible.
To file for unemployment, you need to contact your state’s unemployment office. Check their website to see what the best method of filing is. You can find your state’s unemployment website in this list compiled by the U.S. Department of Labor.
Federal student loan relief
The CARES Act also includes financial relief for federal student loan borrowers. This includes an automatic six-month payment suspension, 0% interest on federal student loans, and halted collections.
You can learn more about federal student loan relief at The Student Loan Payment Suspension and Interest Waiver: What You Need to Know.
The U.S. Department of Housing and Urban Development is suspending foreclosures on single-family mortgages held by the Federal Housing Administration through at least the end of April. This includes Fannie Mae and Freddie Mac.
You need to contact your lender online if you’re in danger of missing a payment.
President Trump ordered HUD to suspend evictions through at least the end of April.
Some state and local governments have also instituted moratoriums on evictions for renters, including Florida, New York, Seattle, and Los Angeles. You can contact your local city or state’s housing websites to find out what’s happening on your local level.
15 things to do if you are having trouble paying bills
1. Create an emergency budget
An emergency budget is a leaner version of your regular budget that focuses on essential spending only – things like food, shelter, utilities, transportation, basic clothing, and medicine. It takes what you’re currently making after having your hours cut or losing your job and figuring out what you have left to spend.
Think about the bare minimum you need to get by at the moment.
If you already have a budget (I highly recommend them for everyone!), you can start by cutting things like entertainment costs, going out to eat, haircuts, cash for extra spending, etc.
See what your emergency budget allows, then ask yourself, “Do I still need to cut more? What else can I cut if I can’t pay my bills?”
Cutting out extras that feel essential might be necessary, like an expensive cell phone plan, cable, streaming services, trim your grocery budget, etc. You might even need to temporarily stop making retirement contributions and some debt payments.
You do need to keep making payments on things that will affect your credit score, so keep making the minimum payment on your credit cards, your mortgage, and other loans. However, because this epidemic is so widespread, there are a number of lenders that are offering temporary help to their customers. More on this further down.
If you need help starting a budget, check out these articles:
2. If you can’t pay your mortgage
Housing is one of the largest bills for many Americans, making it one of the hardest to manage if you’ve lost your job or had your hours cut. Fortunately, a number of lenders throughout the U.S. are willing to work with homeowners whose finances have been affected by the coronavirus.
I’ve heard a number of people say that you need to be direct about how this pandemic has affected your finances when you call and speak to lenders, so keep that in mind. You might even need a financial hardship letter, which you can find out how to write here.
Here’s a list of mortgage lenders that are offering temporary assistance:
- Wells Fargo Home Lending is granting an immediate three-month mortgage payment suspension. They also aren’t reporting past-due payments to credit reporting agencies.
- Ally Bank is offering payment deferrals for up to 120 days without late fees.
- BMO Harris is deferring payments for up to three months.
- Citi has created a hardship program that you can find out more about on their website.
That’s just a few banks, and you can contact your lender to find out if it has any temporary assistance programs.
3. If you can’t pay your rent
Renters have some options as well, and you can start by contacting your landlord or property management company to see how they’re helping their renters.
United Way, Salvation Army, Catholic Charities, local community action agencies, and local housing authorities also may be able to help if you can’t make rent right now.
You can also google “help with rent [name of your city].” You will get a list of local agencies with phone numbers and websites.
And, this blog post was created to help renters find out about laws and resources by state.
4. Contact credit card companies
This is another tough one because destroying your credit card debt is one of the best ways to be able to afford your bills in the future. Plus, relying on credit cards when you have trouble paying bills is a reality for many Americans.
Fortunately, a number of credit card companies have made commitments to help cardholders who are experiencing financial stress because of the coronavirus. Most are helping on a case-by-case basis, so contact the card company before assuming anything.
- Chase is helping its customers by waiving fees and extending payment due dates.
- American Express is waiving interest and late payment fees for eligible personal and business cards.
- Bank of America has an online request form for payment deferrals.
- Citi customers can ask about temporarily pausing minimum payments or extending your line of credit.
- Goldman Sachs has a program that allows customers to skip March 2020 payments without accruing any interest
- Discover can help with payment timing, late payments, and fees.
- Capital One has an assistance program to waive interest and fees.
- Synchrony may be able to waive fees and evaluate credit limits.
Reach out to your issuer, be direct and honest about what’s going on. And if you can keep making credit card payments, keep making them.
5. If you can’t pay your utilities
A number of energy and other utility companies across the country have announced plans to help Americans who can’t afford their payments. These include Consolidated Edison company of New York, Pacific Gas and Electric of California, Pennsylvania-based PECO, and Florida Power and Light.
Some of these companies have temporarily waived late fees and have made a commitment to not shut off service for non-payments.
The FCC (Federal Communications Commission) has also announced a 60 day Keep Americans Connected pledge that ensures Americans don’t lose their broadband or telephone service as a result of the coronavirus epidemic.
So far there are over 650 companies nationwide who have signed the pledge. You can find the full list of companies here. And here’s what the pledge reads:
6. Check out local and national charities and assistance programs
Here’s a list of places you can check to find out local support if you need help buying food, making utility payments, finding mental health services, housing, and more.
- United Way: This is a list of state funds created in response to COVID-19.
- Feeding America: There are over 200 Feeding American Food Banks across the U.S. This link will help you find one close to you.
- Salvation Army: This organization offers emergency financial assistance, emergency shelter programs, food and nutrition programs, and more.
- us: Find thousands of local agencies and nonprofits that offer help paying rent or finding affordable housing.
- The Crisis Text Line, Sanvello, Mental Health America, and Genoa Telepsychiatry are just a few places to find free mental health services.
7. Negotiate for a lower rate on your car insurance
This is a pretty easy way to reduce a necessary bill, and you might be able to save an extra $30-$100 each month.
It’s just a simple call to say, “Hi, I’m a loyal customer. Are there any discounts I can take advantage of right now?” Another option is shopping around for a less expensive car insurance company. I did this last year, and now I’m saving around $100/month.
8. Get a cheaper cell phone plan
Cell phone plans can be insanely expensive, and they are a good bill to assess if you can’t afford more essential payments like housing and food right now. And considering that many of us are forced to stay at home right now, you probably don’t really need an expensive data plan right now. Just connect to wifi at home.
You can start by contacting your cell phone provider about lowering your plan, but there are also a number of discount carriers worth checking out: Cricket Wireless, Republic Wireless, Mint SIM, Ting, Virgin Mobile, Straight Talk Wireless, and Boost Mobile are just a few.
Most of these carriers have plans ranging from $15-$40/month. I currently use AT&T, but I have one line with Republic Wireless (an emergency line for one of my kids), and it’s $15/month.
9. Get rid of your car payment
If you’ve followed M$M since the early days, then you know one of Bobby’s favorite pieces of personal finance advice is ditch your car payment.
The reason is that cars are depreciating assets, meaning you’ll never make back what you pay for it. This is especially true if you have a brand new car and/or a car payment.
There are also a ton of great, used vehicles out there that are dependable, look decent, and cost you significantly less each month.
Learn how to get rid of your car payment at How to Get Rid of Your Car Payment: The Ultimate Guide.
10. Cut cable
Streaming services have made cable nearly obsolete, and you can find some much-needed room in your budget by switching from cable to a cheaper alternative.
Trust me, you can still find a lot of your favorite shows through streaming services, plus you’ll have access to must-watch content… Tiger King anyone?
11. Find relief for private student loans
The current changes to federal student loans don’t offer relief to private student loan borrowers, but you might still have options. Here’s what you can do:
- Call your loan servicers and be ready to explain how your finances have been affected by this crisis.
- Ask about assistance programs. Some lenders might be able to suspend payments, temporarily lower your interest rate, or offer interest-only payments.
- Make sure you understand the exact terms before agreeing to anything, like how long the relief will last, when interest capitalizes, and how to resume normal payments.
- Get the details in writing and get confirmation that you’ve enrolled in a relief program.
- Consider refinancing your private student loans. Interest rates are low now, but refinancing isn’t for everyone. You can learn more at Should I Refinance My Student Loans?
12. Find a roommate
This might not be an option for everyone and I know it’s not ideal, but it’s worth mentioning when you can’t pay your bills. You might have friends who are also struggling to pay bills right now too. You might even need to think about moving back in with your parents or a relative.
My husband and I had roommates when we first bought our house, and it was a great way to bring in some extra cash. We even lived with my in-laws for a few months while we saved up to buy a house.
Sometimes you need to take drastic measures, and remember that it’s only temporary.
Learn more at How to Survive Moving Back in With Your Parents.
13. Increase your income
Right now, there are more financial relief options for anyone who is struggling to pay their bills, but that’s not always the case.
So, if you’re wondering what to do if you can’t pay your bills, then you should consider increasing your income. There are only so many ways to cut your spending, and sometimes it’s not enough.
Here are some of the best ways to increase your income:
14. Think before you try any extreme options
It can be really tempting to look at extreme options right now, I get it. But please, please, please exhaust all of your other options before you add credit card debt, take a cash advance, or borrow from your retirement savings. And I hope you never feel like you need to take out a payday loan.
These options can cost you exponentially more money in the long run and wreck your chances for future financial stability.
Double or triple check your emergency budget, try reducing your bills as much as possible, and see if there are ways to make more money.
15. Start an emergency fund when you’re back on track
Thinking about the future when you’re trying to cope with the present is really freaking tough. But let this time be a reminder of how important it is to have some emergency savings.
An emergency fund can help you if you lose your job or have your hours cut, but it can also help you pay for unexpected expenses, like car repairs, medical expenses, vet bills, and more.
It’s agreed that you should have at least three months' worth of expenses saved in your emergency fund, but six months is an even safer bet. If you’re self-employed, closer to a year’s worth of expenses saved is an even better option.
Trouble paying bills? The final word
Experiencing financial hardship is one of the most stressful things to deal with, and we’re in a time when so many people are struggling.
Staying afloat will take making adjustments to your regular spending, but this won’t last forever.
The reality is that there are even more options available than ever before. The government has extended itself, big banks are helping, there are more local relief programs, and people are helping people.