Budget Leftovers
It is extremely difficult to setup a budget, especially when you
are behind on some of your bills. Even if you can make your
regular bills and expenses fit neatly into your budget, what can
you do if you don't have the money to catch up?
I have listed several methods and circumstances below that may
help manage setting up your budget and begin to pay those
overdue bills. Since there are as many different budgets as
there are people that try to set them up, this list may not be
all inclusive. It may, however, give you some ideas that will
fit your individual problem.
Unless you don't have any income at all, there are a couple of
things that should never be late. Your rent or house payment and
utilities should be paid first, even at the expense of other
bills. This is simply a matter of survival.
The first thing you need to do when setting up a budget is to
determine how much actual take home income you have. Then
determine the amount of your normal bills and expenses. The
Complete Budget and Bill Organizer
http://www.homemoneyhelp.com/BBOonline.html explains this in
greater detail and provides forms to put it on paper.
The below methods assume that you have enough money to cover
your normal bills and expenses but have some bills that have an
amount that is overdue:
When you are setting up your budget and have overdue bills you
need to cut your expenses to the bare bones. This doesn't mean
going without food. However, there are many ways to cut back on
expenses. You can find hundreds of them by visiting my Budget
Stretcher Partner sites listed at http://www.homemoneyhelp.com.
You should always make the initial contact to the company any
time you aren't able to pay a bill on time. Once you have your
budget setup, see if there is any money left over to start
paying the amount that is behind. If you do have some money left
over, when you contact the company, find out if they will accept
paying a little extra each month, without penalty, until the
overdue amount is paid in full.
Contact a your local Consumer Credit Counseling Service. You can
find them in your phone book. They can assist you by contacting
your creditors and establishing a payment schedule that will fit
your budget.
If your overdue bills are credit cards, consider transferring
your balances to either a credit card you already have or can
obtain. This will do a couple of things. It will normally lower
your monthly payment and it will eliminate your overdue status.
Be extremely careful doing this. The credit card companies you
paid off will be using every means they have to get you to use
their credit cards again. Cut them up and notify the company to
close the account.
Look for ways to get extra money just for the purpose of paying
your overdue bills. This can be either a temporary part time job
or selling something that you can do without.
If you own your home and have equity in your property, you may
want to consider a bill consolidation loan. While this seems
like an easy out, many people start obtaining more debt after
they receive the loan since they have some disposable income.
There are pros and cons to bill consolidation loans and you
would be wise to investigate it thoroughly.
If you have exhausted all of the above options, you may have to
consider one of the below options. You must remember that filing
bankruptcy can stay on your credit history for up to 10 years
and can have a devastating effect on your future financial plans.
In extreme circumstances, and always as a last resort, consider
filing Chapter 13 bankruptcy protection. This allows an
individual to setup a repayment plan of between 3 to 5 years to
pay off all or part of their debts. You must have sufficient
income to permit a portion of it to be used toward your
repayment schedule.
Another option is Chapter 7 bankruptcy which is the most
commonly filed chapter since it can completely eliminate all of
your debt except the ones you choose to continue paying. There
are exceptions to debts that can be discharged and to what
property is exempt from being taken by your creditors. You
should discuss any bankruptcy actions with a competent
bankruptcy attorney. Only individual's may file for chapter 7 or
chapter 13 bankruptcy.
Just because you are behind on your bills doesn't mean that your
bill collectors can do what ever they want to collect their
debt. You have rights under the Fair Debt Collection Practices
Act. It would be a good idea to visit The Federal Trade
Commission's web site
http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm to find out
what your legal rights are.