You’re desperate. You can’t pay your bills. You believe that the biggest problem is lack of money. It isn’t. Your biggest problem is fear. You’d like to hide. You’d like to cry. You’d like to shove all the bills into a drawer and move somewhere else. Don’t.

You bought more things than you can pay for. That is an error in judgment. Many multi-million dollar Internet companies have faced the same problem of not being able to pay their creditors. You, on the other hand, will most likely pay, and then your errors will be forgiven. Given the evil in the world, your small financial troubles don’t even qualify. How you handle these troubles can show more about your character than the fact you got into debt. It will require great emotional courage and toughness.

Here are the steps to follow if you can’t pay your bills:

Write to your creditors and tell them you can’t pay your bills. For a large bill like a mortgage, make an appointment to talk with them in person. Approach them courageously like a businessperson with a problem that needs solving.

Be prepared in advance with the following information:

1. A budget and a spending plan showing how much money you need to live on. No judge will order you to pay more than you can afford and still live.

2. A repayment plan showing how much you can pay each of your creditors every month.

3. A specific offer for each creditor, such as, “I will pay you $100 each month to clear up this bill in 7 months.” If your situation is desperate, you can offer to settle the bill for 50 cents for each dollar you owe.

You need to know that every creditor will want more than you can offer. They will want the whole amount paid immediately or they will threaten to take dire action. They will try to make you feel like a criminal. You need to hold firm and keep making the payment you can reasonably make. In many cases they will eventually accept the deal.

Don’t ruin your ability to pay on other bills by giving in to the most vocal collectors. If they threaten to sue keep making payments according to your payment schedule. If you give in to their demands, they may terminate service anyway thinking they have gotten all they can out of you. In some instances, the hope of ultimately collecting the bill is what keeps them providing you with service.

Know what your strengths are! First, the lender would rather stretch out your payments than repossess. Second, it is cheaper to deal with you rather than hire a debt collector and receive only a small percentage of what they can collect. And third, any interest you pay is compensation for the delay.

If you don’t like the person you are dealing with at the company ask to speak with their supervisor. Explain the situation to them, and ask that your case be assigned to someone who will work with you to pay your bill on a reasonable schedule.

Remember that if you have followed the advice in the previous two columns you will have stopped borrowing any additional money and started living within 65% of your take-home pay. Give yourself a 15% cushion for emergencies and try to make a schedule of paying 20% of your take-home pay toward your debts.

If this is unreasonable you need to look at your standard of living again and cut back your lifestyle. Remember that there are families who live comfortably on half of what you earn each month.

If you really need professional help, contact one of the following nonprofit organizations:

The Consumer Credit Counseling Service at http://www.cccsintl.org/ provides budget counseling, educational programs, debt management assistance and housing counseling. Counseling is available online, by telephone, and in person – in Spanish and in English.

The National Foundation for Credit Counseling at http://www.nfcc.org/ will review your current financial situation to help you determine the best possible solution.

Photo by Stefan Cosma on Unsplash