Guide to Getting Caught up on Late Payments

By Jacqueline DeMarco · July 25, 2022 · 10 minute read

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Guide to Getting Caught up on Late Payments

Sometimes life throws a few curveballs your way. When those curveballs include unexpected expenses—hello, car repairs and medical bills—it can be hard to keep a budget on track. This can lead to paying some bills late (or not at all), which isn’t fun for anyone involved. The business expecting the money is upset. And it can mean you wind up paying more in interest while having your credit score decline.

Here’s helpful advice if you find yourself dealing with late payments. You’ll learn:

•   Why people fall behind on bills

•   Tips for how to catch up on bills

•   What to do once you are caught up on bills.

Why People Fall Behind on Their Bills

Before we talk about how to get caught up on bills, let’s look at some common reasons people fall behind on bills. Knowing the typical pitfalls can make it easier to avoid them in the future and stay on track financially.

A Loss Of Income

Many things can happen in a typical person’s work life to send their income drifting downward. Sometimes an employee doesn’t get as many shifts as they thought they would. Other times they’re laid off and lose all of their income. Maybe they quit their job and have a gap between when they start a new one. Seasonal employment can come to an end. Tips can fall short.

The point being, there are many reasons why someone may lose part or all of their income. It’s hard to pay bills when unemployed or even underemployed. If the income loss was unexpected, the situation can be even tougher.

Medical Emergencies

Healthcare expenses can get so costly that you may receive medical bills that you can’t afford. All it may take is one MRI that isn’t covered by insurance, and you may have a significant amount of debt that can be hard to manage. When the expense is an emergency (perhaps major surgery, a hospital stay, or ongoing treatment), the bill can be staggering. What’s more, a medical emergency may cause a person to lose income if they have to take time off work.

Family Emergencies

•   What types of family emergencies can make it harder to pay bills?

•   A child gets sick, and mom or dad has to skip their shift to stay home and take care of them.

•   Grandma breaks a hip and her son needs to travel across the country to take care of her.

•   A family member passes away, and someone must cover the funeral expenses.

•   A pet (they’re family too, after all) gets injured and requires expensive surgery.

Those are just a few examples of family emergencies that can cause financial strain. It’s easy to see how throwing money at a problem can make it hard to pay bills.

Auto Accidents

From small inconveniences like hitting a curb to major accidents, car repairs can certainly be expensive. Even if you have adequate auto insurance, those deductibles and related expenses can add up fast.

Car accidents can set up a chain reaction in terms of bills going unpaid. Many consumers need to prioritize auto bills as they require transportation to get to work. When those unexpected bills get paid first, a person can fall behind on other monthly expenses.

Household Emergencies

If your roof springs a leak during the rainy season or your air conditioning quits during a heat wave, you are stuck with a big expense you didn’t see coming. When you spend money to remedy this kind of problem, other bills may fall by the wayside. It may become harder to, say, pay your student loan when a home repair is suddenly required.

Spending Too Much

Sometimes, people simply overspend. Their expenses are higher than their earnings. For example, maybe you were invited to a destination wedding, really wanted to go, and ran up a lot of debt flying to Hawaii for the celebration. Or maybe you were thinking about a new car and went ahead and splurged on one after seeing an ad. It happens! But the aftermath of these major expenses can leave a person struggling to stay current on their monthly expenses.

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Tips for Getting Caught up on Bills

As you’ve just read, there are many reasons why people can fall behind on their bills. But once you are dealing with overdue debt, you don’t have to just stay stuck there. So let’s look at tactics for getting caught up on bills and boosting financial health.

Making a List

First things first: It helps to spend a bit of time developing ways to organize your bills. Gather all your bills, and make a list of which ones are overdue, from most overdue to least. This way, it’s easy to see the total amount owed and which fires need to be put out most urgently.

Sometimes, people want to hide from stressful situations like this, but confronting your debt and missed due dates can ultimately be a positive thing. This organizational step can give you the knowledge you need plus a sense of control when you’re behind on bills.

Paying Priority Bills

Now that you have a list of bills ordered by importance, it’s a good idea to start identifying and paying priority bills first. If they all have the same due dates or are all overdue, then you might begin with the bills that have the highest interest rates first (like credit card or loan payments) or the bills that charge the largest late fees. The more interest that accrues, the harder it can be to catch up on bills.

The exception, however, is any overdue bills that relate to necessities, like rent or utilities, taxes, car loans, and child support. Those types of bills need to be taken care of first to keep everyone living in the home safe.

Negotiating Bills

When you’re behind on bills, you may have more wiggle room than you think. You may be able to work out a lower interest rate with your credit card issuer or you might be able to adjust a loan repayment schedule a bit. Or if you’re facing major medical expenses, you could investigate how to negotiate doctor bills with your provider to make them more affordable. The point is, communicating with the entity you owe money to and negotiating may lighten your load.

Creating a Budget

Once you know how much you owe, you can create a budget to help play catch-up. After paying off the bills with high interest rates in full, you might then total up the remaining bills and set a goal for how fast they want to pay them off. You’ll need to look at how much after-tax money you have every month and how much your “musts” (food, shelter, utilities, medical care) cost. The money that’s left typically goes towards debt, savings, and discretionary spending.

You may have to re-allocate a bit to pay off debt. Perhaps you can’t save as aggressively as you would like for a down payment on a house and need to focus on clearing up your bills. Or maybe you need to delay travel plans for a while to free up some cash to take care of your remaining debt.

Side Hustles or Second Jobs

If you are struggling to keep up with bills that are overdue, you might consider the potential benefits of a side hustle or second job. These options can be especially helpful if you have overdue bills with high interest rates that threaten to make your debt snowball. The faster you pay those bills down, the less interest you will pay. You can always take a break from the extra work when the overdue bills are gone.

It’s worth noting that sometimes these steps aren’t enough. If you are feeling overwhelmed by debt, you may need to consolidate high-interest debt (say, by finding a balance transfer credit card that gives you a no- or low-interest rate for a while so you can catch up). Another option is to take out a personal loan at a lower rate than the debt you owe, so you are swapping more expensive debt for less expensive debt. Or you might want to talk to a credit counselor at a non-profit organization like the National Foundation for Credit Counseling or NFCC.

When You Are Caught Up

Once you pay off your overdue bills, consider how to move forward. There are steps you can take to avoid falling behind again in the future.

Following Your Budget

Re-evaluate your budget. Focus on paying down your debt; you might be able to budget for extra debt payments each month. This doesn’t necessarily mean a full additional payment. Look into how automatic bill payments work, and see if you can, say, put an extra $100 or more towards a loan’s principal every month to pay it down more quickly.

Saving for an Emergency Fund

So, why is saving for an emergency fund a financial priority? When someone has an emergency fund, if, say, a job loss or unexpected bill arises, they have some extra cash. They don’t need to turn to credit cards or loans. Having at least three to six months’ worth of basic living expenses can be a welcome relief if you encounter a rainy-day situation.

Paying on Time

Prioritizing on-time payments is a wise move once you no longer have late bills. It’s a very important step that contributes to your financial well-being. You might want to explore how bill pay works and set up automatic payments to make sure you hit your due dates.

Not only can paying bills on time make it possible to avoid extra interest payments and fees, but it helps improve your credit score. Prompt bill-paying is the single biggest contributor to that three-digit number that can impact the mortgage rates you qualify for and more.

Tracking Spending

Tracking expenses can make it easier to see where money is going and to adjust a budget accordingly. It also makes spending more conscious and makes it harder to accidentally overspend. Some people like to log this sort of information in a journal or on a spreadsheet; others use one of the many apps available. The latter can even cluster your spending by category to show you trends in how you use your cash.

Bank Accounts That May Help You Save and Budget

If you want to save on banking fees, you may find an online bank or a credit union that suits your needs. Credit unions are not-for-profit so they tend to charge their members fewer and lower fees. They may well offer them higher interest rates on savings accounts too, which makes it easier to spend less and save more. Online banks are also usually able to offer these perks since they save so much money by not having expensive bricks-and-mortar banking locations.

What’s more, these kinds of financial institutions may offer educational tools and/or apps that help enhance your money savvy and build your skills.

Banking With SoFi

There are a lot of reasons why people fall behind on their bills. Fortunately, with a little planning and wise budgeting, it is possible to play catch-up. After that, use your newly honed money skills to put an action plan in place to avoid future debt traps.

The bank you partner with can also impact your financial status. At SoFi, we make banking easy and can help your money grow faster. Open a new bank account with direct deposit, and your Checking and Savings will earn a competitive APY while you pay absolutely no account fees.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.


Should I pay all my bills at once?

Paying all your bills at once, if possible, can help you stay on top of your expenses and may help improve your credit score. This step can streamline the process and help make sure nothing slips through the cracks. That said, there’s nothing wrong with spacing bills out throughout the month to make it easier to afford them as long as they’re paid before their due dates.

What to do when you can’t catch up on bills?

Make a list of all bills due, prioritizing the ones that are for necessities (housing, for instance) and those with the highest interest rates. Then budget for how to pay them off. You might have to slow down saving towards a certain goal (a vacation, the down payment for a home) or consider taking on a side hustle or second job in order to get caught up.

What bills should I prioritize?

It’s a good idea to prioritize any bills relating to necessities, such as housing and utilities. Then it’s helpful to move onto bills with high interest rates and fees that can mount and make the bills even more difficult to pay off.

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