If you have fallen behind on some, or even all, of your bills, the important thing is to take action now to prevent your finances from getting worse. Whether you lost your job, had an unexpected emergency, or simple mismanaged your money, there are several things you can do to get your finances back on track. This will help you not only pay off all your overdue bills, but will help to repair your credit report, as well. Below is a look at some of the things you should do if you are behind on your bills.

List Your Unpaid Bills

The first step to fixing any problem is to understand exactly what the problem is. With that being said, your first step should be to make a list of all your unpaid bills and/or overdue bills. This may make your feel overwhelmed, but it is important to get a clear picture of exactly where you stand and how much you owe on all of your bills. This is the only way you can create a workable solution to help pull you out from under this debt.

Make a Workable Budget

The next step is to make a workable household budget to determine how much money you have available each month to pay towards this outstanding debt. If you already have a basic household budget, look for areas where you can cut down on your expenses so you will have a little more money to put towards your bills. If you have never created a budget before,

now is the time to start one. You should start by making a list of all your monthly income and then determine how much money you have available to spend on various categories, such as housing, food, transportation, and entertainment. This will help you determine how much money you actually have left each month towards getting caught up on your bills.

Contact Your Lenders

The worst thing you can do at this point is to ignore the situation because your finances will only get worse over time. Instead, be proactive and contact each of your lenders separately. Explain to them your current financial situation and your desire to get caught up on your bills. If you contact them first, they will be more likely to work with you and set up a payment arrangement that fits your budget. While it may take a little time to completely get caught up on all of your bills, over time and bill and bill you will regain your financial stability.

Take Out a Consolidation Loan

In some cases, it may be beneficial to consolidate all of your outstanding bills into one low-interest loan. The vital factor here is a low-interest loan. If you can obtain a low-interest loan from the bank or via government benefits, than this may be the best option for you. This would allow you to make just one monthly payment instead of several payments to all your lenders. When taking out a consolidation loan, make sure you are only borrowing the exact amount to consolidate current debt and not taking on more. It is also imperative that the interest rate and fees don’t put you in a worst off position. Be sure to compare your options and see which way fits into your budget and offers you a cost savings to help you get out from under your debt.

If possible, try to control your debts from budgeting and negotiating new repayment terms with your lenders.

These steps will help you pay off all of your outstanding debt, so you can live in financial freedom. It will not be easy and it will take a commitment and careful planning, but you will eventually get caught up on your bills. The most important thing is to be proactive and take care of any outstanding debt now, before it becomes a greater problem later.