How to Get Back on Track Financially

With rising inflation and cost of living, more Americans are having a harder time paying their bills than this time last year. In fact, 32% of adults have paid a bill late in the last six months according to a LendingTree study.

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If you’re behind on your bills or struggling to make ends meet, don’t panic. There are a few things you can do to get back on track with your money.

First, take a deep breath and assess your situation.

  • What bills are you behind on?
  • How much do you owe?
  • Can you make a lump sum payment to catch up, or do you need to work out a payment plan?

It can feel like there’s nothing worse than being behind on your bills. The phone calls, the late fees, the anxiety of not knowing how to make ends meet. But when you’re in that situation, it’s important to prioritize which bills you pay first.

Once you have a handle on how far behind you are financially, it’s time to start getting back on track with your money.

Here’s a quick rundown of what bills are most important to pay:

1. Housing

Before leaping to thoughts of foreclosure or eviction, let’s make a plan for how you can tackle one of your biggest bills each month.

If you’re behind on your mortgage, there are a few things you can do to catch up.

First, talk to your lender. They may be willing to work with you to create a payment plan that helps you catch up over time.

Second, consider refinancing your mortgage. After closing, you may not have to make payments for a few months, making it easier to catch up. The downside here is that with interest rates rising, you may wind up locking in a higher payment.

Third, you can try to sell your home. This may be a good option if you’re significantly behind on your mortgage and can’t afford to catch up.

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Lastly, consider bankruptcy.

Bankruptcy isn’t right for everyone, but if you’re struggling to keep up with your mortgage payments, it might be worth considering. Just make sure you understand what it can and can’t do, as well as the potential drawbacks before you make a decision.

What is a bankruptcy?

There are several types of bankruptcies, and each has its own set of rules and regulations. The most common type of bankruptcy is Chapter 7, also known as liquidation bankruptcy. This type of bankruptcy allows you to discharge most of your debts and start fresh.

Another common type of bankruptcy is Chapter 13 bankruptcy, also known as reorganization bankruptcy. This type of bankruptcy allows you to keep your property and repay your debts over time.

There are also other types of bankruptcies, such as Chapter 11 bankruptcy and Chapter 12 bankruptcy. These bankruptcies are less common, but they may be right for you depending on your unique circumstances.

So, how do you know if bankruptcy is right for you? Here are a few things to consider:
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Your Income: If your income is low and you don’t have much room in your budget for your mortgage payment, bankruptcy might be a good option. That’s because bankruptcy can allow you to reorganize your finances and eliminate some of your debts, which can free up more money for your mortgage.

Your Assets: If you have a lot of assets, such as multiple vehicles or a second home, you might have to give some of them up in bankruptcy. That’s because creditors can claim your assets to help pay off your debts.

Your Debt Load: If your debt load is too high, you might not be able to repay all of your debts even if you reorganize your finances in bankruptcy. In that case, bankruptcy can help you eliminate some of your debts, so you can focus on repaying the rest.

Your Credit Score: Bankruptcy will damage your credit score, making it harder to get a loan in the future. But if your credit score is already low, bankruptcy might not make much of a difference.

If you’re considering bankruptcy, it’s important to talk to a bankruptcy attorney to find out if it’s the right option for you. They can help you understand the pros and cons of bankruptcy and advise you on whether it’s the best option for your situation.

Getting back on track with rent:

There are a few things you can do to get back on track with your rent payments.
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First, see if you can work out a payment plan with your landlord. This will allow you to spread out your payments over time and avoid getting evicted.

If your landlord isn’t willing to work with you, your next best option is to try to get financial assistance from a government or nonprofit agency. There are many programs available that can help you pay your rent. Start with your county and city, first.

Finally, part of getting back on track financially is understanding your rights as a tenant, especially if all else fails and you’re facing an eviction. (Trust us, there’s life after an eviction. )

What are evictions and how do they set you off financial track?
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Evictions are legal proceedings that can be initiated by landlords or property managers when tenants fail to pay rent or violate the terms of their lease. The process varies from state to state but typically involves a notice period followed by a court hearing. If the judge rules in favor of the landlord, the tenant will be ordered to vacate the property.

There are a few things you can do if you’re facing eviction. First, try to negotiate with your landlord. If you can agree, make sure you get it in writing. You may also be able to find legal assistance through your state’s legal aid society or tenant’s rights organization.

If you’re facing eviction, it’s important to understand your rights and options. With the help of an experienced attorney, you may be able to stay in your home and avoid being forced out onto the street.

2. Utilities

If you’re behind on your utilities, you could be at risk of your provider disconnecting your service. This can be especially problematic in the summer or winter when you need heat or air conditioning.

First, call your utility provider and explain your situation. They may be willing to waive a late fee or work out a payment plan with you.

Second, look for resources throughout your community. 2-1-1 is a national hotline that will help connect you to local resources.  These same resources may even provide assistance with housing, medical bills, or food. A good place to start is using the Benefit Finder on

Third, try to find ways to cut expenses.

In this image, a woman is using a hand fan, while battling rising utility prices.

4. Car payments: Especially if you need to get around.

Trouble paying for your car? Whatever you do, don’t just stop making payments and hope for the best. Here’s how to take action on your car payment.

First, call your lender and explain your situation. They may be able to work with you to create a repayment plan that fits your budget. This could include refinancing the loan, waiving a late payment fee until you’re caught up, or adding the payment to the end of the term of your loan.

Second, if you’re able, try to make a lump sum payment to catch up on your payments. This will show your lender that you’re committed to making things right.

Third, consider selling some of your possessions, putting your car to work with Uber, Lyft, or another side hustle, or getting a part-time job to raise the extra cash you need to make your car payments.

Fourth, if all else fails, you may need to file for bankruptcy. This should be a last resort, but it may be the only way to get out from under your car payments and it may be better than a repossession.

5. Credit cards

As recent GOBankingRates survey found that 30% of Americans have between $1,001 and $5,000 in credit card debt, while 14 million Americans have more than $10,000 in credit card debt.

“As a money coach, I’ve had a few people who put their credit card payments before utilities or other higher priority bills because they’re worried about their credit,” says Erin Papworth, founder of

“If you’re behind on your credit card payments, you’ll start accruing interest and late fees. This can quickly add up, so paying your credit card bill as soon as possible is important, but not as important as making sure your basic necessities like your food and housing are covered.”

Instead, focus on what actually happens when you make your credit card payments.

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What actually happens when you’ve fallen off financial track and can’t pay your credit card bills?

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Credit card companies are relentless when it comes to collecting debt. If you can’t pay your credit card bills, they will do everything in their power to get the money from you. This includes hiring collection agencies, filing lawsuits, and even garnishing your wages. (The bright side is, you actually can tell them to stop contacting you.)

The first thing you’ll notice if you can’t pay your credit card bills is that your credit score will take a hit. This is because late payments are reported to the credit bureaus and your payment history accounts for 35% of your total score. Your credit score will decrease with each late payment, and it will take several years to rebuild your credit.

If you continue to miss payments, your credit card company will eventually turn your debt over to a collection agency. The collection agency will then contact you to try to collect the debt. They may call you at work, send you threatening letters, or even show up at your home. If you don’t pay the debt, the collection agency may sue you.

If you’re sued by a collection agency, you’ll need to appear in court. The judge will then decide if you owe the debt. If you’re found to owe the debt, the judge may order you to pay it back in a lump sum or through wage garnishment.

Wage garnishment is when the court orders your employer to withhold a certain amount from your paycheck each week and send it to the collection agency. This can be a very difficult way to pay off debt, leaving you with less money to live on each week.

If you’re struggling to pay your credit card bills, there are some things you can do to try to make it easier and get back on track financially.

If you’re falling behind on your payments and want to get back on track financially, you first need to contact your credit card company and explain the situation. They may be able to work with you to create a payment plan that makes it easier for you to catch up.

If you’re unable to make your payments, there are still options available to you. One option is to negotiate with your credit card company. You may be able to get them to freeze your account, lower your interest rate, or waive late fees.

Another option is to consult with a credit counseling service. These services can help you create a budget and work out a plan to get your debt under control.

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6. Medical bills:

If you’re behind on your medical bills, you could risk having your service disconnected or your credit score damaged. Medical bills are often negotiable, so it’s worth trying to work out a payment plan with your provider.

7. Student loans:

If you’re behind on your student loan payments, you could be at risk of defaulting on your loan. This will damage your credit score and make it difficult to get future loans.

When facing a pile of bills, it can be overwhelming to know where to start. But by prioritizing which bills are most important, it will be easier to avoid missteps that sink you further into debt.

Here are tips to stay on track financially:

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1. Make a spending plan. This may seem obvious, but knowing where your money is going is an important aspect of getting and staying on track financially. You can connect your bank accounts to a money tracking app like and plan your bills.

2. Save up for a rainy day. It’s always a good idea to have some money saved up in case of an emergency. This way, you won’t have to rely on credit cards or loans if something unexpected arises.

3. Invest in yourself. One of the best ways to get ahead financially is to invest in yourself in order to make more money. This can include taking courses, starting a business, or investing in stocks and real estate.

4. Make it a habit. It’s easy to fall into the trap lifestyle creep, buying things you can’t afford or using credit cards to make ends meet. But if you want to get back on track financially, it’s important to stay disciplined and resist the temptation to spend more than you have.

Following these tips, you can get back on track financially, despite inflation. Remember to be patient and disciplined, ask for help when you need it, and you’ll be well on your way to a bright financial future.

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