handling late payments

How To Bounce Back From Late Payments

One of the riskiest situations you can find yourself in when it comes to managing debt is habitually making late payments.

Falling behind on your bills can be caused by many factors — you may not have a monthly budget that’s easy to work with, or you may have experienced an emergency situation wherein you had to make an unexpected payment.

Whatever the reason, there are several ways in which you can begin to recover from late debt payments. Paying off expenses on time is important to preserve a good financial record. Read on to discover the consequences of late payments and five tips to avoid making these a regular occurrence.

Consequences of Making Late Payments

Car Payments

Some auto lenders can be less forgiving than others when it comes to late car payments. While some have a tendency to attempt to reacquire your vehicle, others might be open to negotiations. It all comes down to the individual lender, so if you foresee future late payments on your loan, make sure to open up the issue as soon as you can.

With temporary setbacks, some lenders might allow installment payments to be lowered until you can achieve financial stability again. You can also consider refinancing to have lower interest rates or pay loans over a longer term.

Mortgage Payments

If you have missed a mortgage payment, you may be at risk of foreclosure. Failing to pay a second or even third payment can put you in a more dangerous situation. Many lenders ask homeowners to make payments at the start of the month, so grace periods are usually only given until the middle of the month. Surpassing this date labels your payment as delinquent.

Aside from this, paying your mortgage outside its due date has a significant impact on your credit score. You may not be able to qualify for new loans or credit in the future if you have been routinely making late payments.

5 Tips for Catching Up on Late Payments

Whether you’re making late payments on your car, your mortgage, or even your credit cards, these can be reported, affecting your credit score and risking collateral connected to the loan. Below are five tips you can follow to make sure you can catch up on late payments.

Contact Your Lenders and Loan Servicers

You must immediately contact your creditors to explain the situation if you need more time to make a payment or if you want to consider other options. Many financial institutions coordinate with customers to meet individual needs, so you should check your lenders’ websites for information that can assist you in meeting your goals. With the COVID-19 pandemic, loan servicers may be able to provide loan extensions, reduced interest rates, forbearance, and other versatile options for repaying.

Aside from this, credit card companies can offer you multiple options for meeting late payments. Some lenders may be willing to waive overdrafts and late fees, while others may enable you to adjust or skip other payments.

Create a Budget and Prioritize Late Bills

If you haven’t made a budget yet, you must immediately make one and list your expenses to ensure you have enough finances to meet future payments. To begin building a budget plan, you can tabulate a list of loans that you’re struggling to compensate for and determine how you can fulfill each of these bills.

After organizing your late payments, make sure to arrange your bills in order of significance. Mortgage payments and utility bills generally should take precedence over other bills, as having electricity, water, and shelter are necessities. After these, prioritize bills depending on factors such as interest rate and late fees. Car payments follow suit to ensure everyday transportation, and then credit card bills end up last.

Find Simple Ways to Produce Additional Money

After meeting all your needed expenses, calculate how much extra cash you can accumulate for paying overdue payments. It’s a must for consumers to avoid unnecessary purchases if debts are piling up. This includes eating out at restaurants, going to the cinema, and other costly forms of recreation.

For those with harsher debt obligations, you may also want to consider cutting monthly subscription services like cable TV. Additionally, cutting back on expensive grocery items and opting for cheaper options can help you stay on track until you’re able to catch up on your overdue bills. Lastly, you can try selling unused objects around your home via flea markets or garage sales to acquire extra money.

Work a Second Job

For people with more time on their hands, you may want to consider taking on a second job to catch up on your late payments. This is a good way to reacquire control of finances at a faster rate. However, this must only be a temporary fix, as there may be complications in balancing two jobs at once, leading to even more financial consequences in the long term.

Part-time jobs with a pay rate higher than minimum wage can provide you with the additional money you need to pay late bills. You may want to consider working as a babysitter, a tutor, or a personal assistant, which are all flexible options.

Reinforce a Monthly Budget and Save for Emergencies

The best way to handle late payments is to avoid making them in the first place, and one of the most important steps to achieve this is sticking to a monthly budget. Regardless of your salary, having a stable budget is important to ensure you can keep up with all your personal expenses.

In your budget, make sure to allocate some money towards an emergency fund. Financial experts suggest saving at least three to six months’ worth of living expenses to prevent future debt issues.


All in all, if you’ve been making late payments on obligations such as your car, home, and credit cards, it’s essential to find ways to repay your debts and communicate with creditors to avoid financial consequences in the long run. If you’re struggling, we recommend speaking with a nonprofit credit counselor to help you along the way.

About the Author

Scroll to Top