Sounds from the Past affecting the Future

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The Basics
How to not pay your bills

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Here’s how to dodge the repo man and buy some time while you try to pull your financial life together.

By Liz Pulliam Weston

This is not a lesson in how to be a deadbeat.

It’s a lesson in how to do the least damage when you can’t pay all of your bills.

Most stories about dealing with debt assume you have the money to pay most or all of your bills. That's not always the case. Thanks to bad planning, bad decisions, bad luck or a combination of all three, sometimes you just don't have the scratch.

Yet filing for bankruptcy, despite its recent popularity, isn't always the solution. If your bills aren't that monumental or your financial prospects are likely to improve, a Chapter 7 filing could be a major overreaction. You also may have a profound distaste for skipping out on your creditors -- even if you can't pay them just now.

It can be helpful, in those times, to understand how to create some breathing room for yourself so you can formulate a plan to get back on your feet while minimizing the long-term financial fallout.Don't let retirement
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Unfortunately, many people in financial crisis simply stick their heads in the sand, refusing to admit the severity of the problem and ultimately making matters worse. They pay a credit-card bill when the mortgage is due, for example, simply because a collector is pressuring them, or they stop paying any of their bills because they can't pay them all.

Knowing which bills must be paid and which can wait -- and for how long -- is essential for your financial survival.

The essentials
Any late payment can hurt your credit score. The three-digit number lenders use to gauge your credit-worthiness is extremely sensitive to "lates," although generally you must fall at least 30 days behind for the delinquency to be reported to credit bureaus and to affect your score. The later you are and the more accounts that are delinquent, the more devastated your score will be. The damage may persist for years, but it isn't permanent; as soon as you're back on your feet, you can begin repairing the mess (see "7 fast fixes for your credit score").