When Money Is Tight: Who to Pay and How to Ask

The story: Lee makes a plan and a call

Lee lists bills by priority at a kitchen table, then calls a card company with notes ready.

1. Narrator: Lee’s hours were cut this month. Rent, the electric bill, the car payment, a card and a medical bill are all due.
2. Lee: There isn’t enough for everything. Where do I even start?
3. Narrator: Start with what keeps life running: the roof, the lights and the ride to work.
4. Narrator: The card and the medical bill come after. Lee calls them before the due date to ask for help.
5. Lee: My hours were cut. I can pay part this month. Do you have a hardship program?
6. Narrator: The card company lowers the payment for three months. Lee writes down the name, the date and the deal.
7. Narrator: Roof, lights, ride to work, then the rest. Call before you miss.

What you’ll learn

1. Protect the basics first

   When there isn’t enough, many people pay in this order: housing, utilities, transport to work, insurance, child support and taxes. Next come secured debts you need, like the loan on the car you drive to work. Cards and medical bills come after.

2. Secured and unsecured debt

   A secured debt is tied to something the lender can take back, like a house or a car. An unsecured debt, like a card or a medical bill, isn’t. Missing any payment still adds fees and can hurt your credit, so a call to the lender before the due date matters for both kinds.

3. Call before you miss

   Lenders often have options, but usually only if you ask. Call before the due date and ask for a hardship program, a lower payment for a while or a new due date. Write down who you spoke to, the date and what they agreed to.

4. A collector doesn’t set your order

   If a debt goes to collections, you have rights. The collector must give you a written validation notice that shows the debt. You can ask them to stop contacting you, and threats aren’t allowed. Cutting costs and stretching savings are covered in the lesson Your Hard-Times Plan.

Key words

secured vs unsecured debt

a secured debt is tied to something the lender can take back, like a car; an unsecured debt, like a card, isn’t

hardship program

a lender’s plan that lowers or pauses payments for a while

collections

when a debt is handed to a collector after missed payments

validation notice

a written notice from a collector that shows the debt and how to dispute it

Common questions

Can my power be shut off in winter?

Many states limit shutoffs in very cold or hot weather, and there are programs that help with energy bills. Call your utility before you miss a payment and ask.

What if the debt isn’t mine?

Dispute it in writing within the window on the validation notice. The collector then has to pause collecting until they verify the debt.

Remember this

Roof, lights, ride to work, then the rest. Call before you miss.

Try it: Get ready before a tight month

1. List your bills and debts in the order from this lesson.
2. Find each lender’s hardship phone number and write it next to the bill.
3. Write a short call script: what happened, what you can pay and what you’re asking for.

No account needed: your bills, a phone and a sheet of paper.

Live facts

Numbers that change over time, with when they were last checked and where they come from.

• Your rights with debt collectors

  Source: CFPB(opens in a new tab)

• Debt collection words, including the validation notice

  Source: CFPB(opens in a new tab)

• Help with energy bills and shutoffs (LIHEAP)

  Source: HHS(opens in a new tab)