First of all, I get it! Life happens. No one intentionally want to miss payments. There are times you won’t have no other choice but to be late on a bill or two.Understand the consequences of late payments. Being 30 days late on just one bill can knock your credit score down to almost 100 points. At times, you may fall in hard times and it happens. But there are ways to reduce your chances of wrecking your finances even more.
1. Create A Budget
First, Create a Budget from scratch. This is the easiest way to control your habits and spending. Grab a pen and note pad(old school way)!Each month, I list all of my bills and list all of my income. I categorize each bill for the month and determine each date each bill is due. This helps me to slow down on unnecessary spending. Another way that has worked for me , is printing out bank statements each month and seeing where all of my money is going besides important bills. I start canceling subscriptions I no longer use. I cut out spending on coffee and fast food. The goal is to find cheaper alternatives.
2. Try Auto-Pay
Secondly, try putting your bills on auto pay. It has NEVER failed me yet. I don’t ever have to worry about missing a bill. I know all of my bills are paid on time . Some companies might even give you a small discount just for enrolling in auto pay. This holds me accountable to not overspend because I know money will be taken out to cover my up and coming bill.
3. Communicate
Third, option is communication. When you’re feeling hopeless or you know you will be late making a payment; call your creditors. It may not work, but it’s worth a shot. Creditors know we are in the middle of a Pandemic/Inflation. Most creditors may be a bit lenient and extend your due date or work or a payment plan. You won’t know unless you try . Effective communication goes a long way.
4. File Bankruptcy
Now, this would be my last resort after you’ve exercised every option. This method is basically asking Bankruptcy court to wipe out all debt you owe and you basically get a clean stative seen clients get their debt discharged and got a new start to life. It can take about 2 years to bounce back to better credit. Understand, not all debt will be discharged and not everyone will qualify for Chapter 7. This would be a good option for someone drowning in thousands of dollars. Find out if you qualify.
5. Don’t beat yourself up
Lastly, stay encouraged. I you’ve hit rock bottom, GET BACK UP. Create an effective plan to get out of the hole and execute. If you have a couple of late 30 days, its okay. Work on being on time for 12 months straight. Then, go 24 more months. All of those on-time payments will offset those few late payments you have. It’s ok. You will be fine! Regroup and re focus. There’s hope!
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