Stop the Bleed: How to Prioritize Bills When Money’s Tight

Money crunches snowball fast: one missed bill turns into fees, shutoff notices, and panicked choices that make next month even harder. The way out starts with a clear order of what to pay first, quick calls to set up hardship options, and a one-week plan to stabilize the essentials. The goal isn’t perfection; it’s to keep a roof, lights, work transportation, and legal obligations intact while you line up payment arrangements for everything else. Below is a practical sequence you can copy, plus scripts and programs that lower immediate costs and prevent costly damage. All recommendations come from reputable government resources you can verify.

A clear order: what to pay first when you can’t pay everything

Start with survival and legal obligations. Pay housing (rent or mortgage) before anything that doesn’t threaten shelter; staying current or setting a repayment plan with your landlord or mortgage servicer prevents the steepest consequences. Housing agencies emphasize contacting your landlord early to discuss a plan; many prefer steady payments over an eviction process. If you live in certain federally assisted housing, a HUD rule requires a 30-day notice before a formal eviction case for nonpayment, but do not assume you’re covered — ask your landlord what applies to your unit and state.

Next, keep the lights, heat, and water on. Call utilities to set up a payment arrangement and ask about shutoff protection and assistance programs. The federal LIHEAP program and state/local funds can help with energy bills; start with the official portals to find your local intake site. If disconnection already happened, those same offices often handle reconnection aid.

Protect work transportation and required insurance. If your job depends on a car, prioritize the car payment and auto insurance to avoid repossession and coverage lapses. Losing transport can trigger income loss, which cascades into more missed bills. The CFPB’s bill-prioritizing tools explicitly weigh risks like repossession and job access as you order payments.

Pay court-ordered obligations. Child support and similar orders can lead to wage garnishment or license issues if missed — keep these current or contact the court/agency promptly to request a modification if your income changed.

Stabilize taxes quickly. If you owe the IRS, set up an installment agreement online or call to adjust an existing plan. Doing so reduces penalties and prevents liens and levy actions; the IRS encourages payment plans when you cannot pay in full. If you already have a plan but can’t afford it this month, call before you miss — agents can often lower the amount based on current income.

Lower federal student loan payments the right way. If a federal student loan is in the mix, check income-driven repayment (IDR) options or short-term deferment/forbearance on the official StudentAid site. IDR can reduce payments — even to $0 — based on income and family size; if your income dropped, update it. If program availability changes, the Department’s site posts current options and deadlines.

Keep basic communications live at the lowest cost. If phone or internet is at risk, apply for the FCC’s Lifeline discount for eligible households; it can reduce the monthly bill and help you maintain employer and creditor contact. Ask your provider about low-income plans while your application is pending.

Then cover minimums on unsecured debts. After the essentials above, make minimum payments on credit cards and personal loans if possible to avoid late fees and additional damage. If cash is too tight, call the issuer and request a hardship program (temporary lower rate, smaller payment, or due-date change). The CFPB’s prioritizer helps you list all bills and sort by risk, not just amount due.

Document your plan. Write down the order you will pay, who you contacted, and what they agreed to. A simple one-page triage list keeps you focused and provides proof if a dispute arises later. The CFPB provides printable worksheets you can copy for this step.

Reality check. If income won’t cover essentials for the next few months, schedule a free session with a reputable nonprofit credit counselor. They can help build a budget, negotiate card concessions through a debt management plan, and point you to rental/utility resources — without telling you to stop paying your debts. (Use national directories to vet agencies.)

Build a 7-day triage plan you can actually finish

Day 1: Map cash in/cash out. List take-home income expected in the next 30 days and every must-pay bill. Circle the four essentials: housing, utilities, transportation/insurance, and court-ordered debts. This becomes your “pay first” column. Use the CFPB worksheet to rank the rest by risk and consequence.

Day 2: Call housing. Landlord or mortgage servicer first. Explain the shortfall, propose what you can pay this month, and ask for a written repayment plan or temporary due-date shift. If you’re in federally assisted housing, ask whether the HUD 30-day nonpayment notice rule applies and what local timelines look like. Keep the conversation solution-oriented and get any agreement in writing.

Day 3: Call utilities. Request a payment arrangement, ask about shutoff protection, and apply for LIHEAP or state energy help right away. If your utility bill is already past due, ask if a medical or winter moratorium exists in your area and what documentation is required. Submit the assistance application confirmation number to the utility if asked.

Day 4: Transportation and insurance. If a car payment is due, ask about moving the due date within the month or a short-term hardship extension. Confirm auto insurance stays active; a lapse can raise premiums and exposes you to major risk. Reduce optional coverage temporarily only if your lender and state rules allow and the change makes sense for your risk profile.

Day 5: Taxes and student loans. For an IRS balance, apply online for a payment plan or call to modify your existing agreement; adjustments are common when income drops. For federal student loans, review IDR or a short-term deferment/forbearance; update your income promptly so the required payment reflects your current situation.

Day 6: Credit cards and personal loans. Ask issuers about hardship programs: lower APR, temporary reduced payments, due-date changes, or late-fee waivers. Confirm whether the account will be closed during hardship and how it will be reported. Payment relief that keeps you current usually costs less than letting accounts fall behind and paying fees later.

Day 7: Tighten the next 30 days. Cut automatic payments you don’t need, pause subscriptions, and set low-balance and large-transaction alerts at your bank. Put due-date reminders on your calendar for every arrangement you made. Small frictions — like a reminder the day before a draft — prevent overdrafts and save fees next month.

What to ask when you call (and how to get it in writing)

Lead with facts and a request. Share a one-sentence reason (“hours cut,” “temporary medical leave”), the amount you can pay this month, and the exact help you’re asking for: a due-date move, lower payment for 3–6 months, a lower APR, a fee credit, or a formal payment plan. Ask the agent to check “hardship,” “assistance,” or “payment arrangement” policies by name — these terms route them to the right playbook.

Ask these questions for each creditor or provider:

• What hardship options do you offer? (lower payment, reduced APR, payment plan, due-date change, fee waivers)
• How long do they last and what are the conditions? (will the account be closed; will interest accrue; how will it be reported?)
• What do you need from me? (proof of income change, application form, confirmation number from a utility-aid program)
• How do we confirm this in writing? (secure message, email, mailed letter — ask for a reference number)

Document everything. Keep a mini log with the date, name/ID of the agent, what was promised, and any reference number. If you don’t get written confirmation within a few days, call back and ask for it. For taxes and student loans, save your online confirmation pages and download any approval letters for payment plans or IDR adjustments.

For utilities and communications services: Ask about payment plans, shutoff moratoriums (seasonal or medical), and whether applying for LIHEAP or Lifeline can pause collection activity while your application is reviewed. Provide the case or application number to the utility if requested.

If collectors contact you: your rights and next moves

Expect a validation notice. If a debt is sent to collections, the collector must send you validation information about the debt. Once you receive it, you generally have 30 days to dispute in writing or request more information; the CFPB’s debt collection rule defines this “validation period” and requires the notice to state the end date. If you dispute within the window, the collector must stop collection until they provide verification.

Use the window wisely. If you don’t recognize the debt, dispute and ask for itemization. If it is yours, you can still ask for written verification and a breakdown of interest/fees. Keep copies of everything you send or receive. If a collector violates the rules (harassment, calling at prohibited times), you can submit a complaint to the CFPB.

Coordinate with your priority plan. Don’t let a loud collector reorder your priorities. Keep paying housing, utilities, transportation/insurance, court-ordered debts, and any active IRS or student-loan arrangements first. If a collector offers a payment plan, make sure it fits after essentials; never agree to amounts that will cause you to miss rent or utilities next month.

Know what you don’t have to do. You don’t have to give a collector bank login information, post-dated checks, or a debit authorization you can’t afford. You can request that they contact you only in writing or at more convenient times.

Get help if needed. Free housing counselors can help with landlord issues; legal aid and nonprofit credit counselors can help you respond to collectors and organize payments. If you suspect a scam, hang up and look up the agency or law firm’s number on your own before calling back.