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How to pay the bills that piled up during the pandemic

Like so many people, I lost a large portion of my income during the pandemic. A lot of bills went unpaid and, often, unopened. For months, I have been inundated with robocalls and neon envelopes from creditors. Last month, I was woken up by the sheriff serving me papers because one of my student loan providers is suing me. That was a literal wake-up call that my finances have reached a breaking point, and the next round of stimulus checks seems infinitely delayed. Because so many of us are in the same leaky boat, I asked some experienced financial advisors how to deal with all the bills that have piled up during the pandemic.

First, collect yourself

“Before you look at your accounts and gather financial documents and statements, sit down and take a deep breath,” says Lauren Anastasio, an New York City-based financial advisor. Anastasio emphasizes that it’s important that you're calm enough to approach making financial decisions. This is not some woo-woo advice. Financial experts generally agree that making good choices about your money requires clarity. That can feel hard when you’re at the end of your financial rope, but finding a way to calm down will help you feel better right now and it will also put you in a state of mind to reasonably think about your financial future.

Get an overall picture of your financial situation

Anastasio recommends taking the time to aggregate your assets in one place and review your account balances before you start trying to make a plan. “Being able to see all of your accounts helps you better appreciate exactly what you own and what you owe,” she says. Hadassah Damien, a financial strategist in Brooklyn, agrees, adds that it doesn’t have to be a complicated spreadsheet. “Make a list, including the company and contact info, the total owed, and when they say it's from,” Damien says.

Again, you don’t have to do it in Excel if that’s not your jam, but both Damien and Anastasio agree that you should get all your financial information together in one place — ie: not in random piles around your apartment. “Keep it all somewhere central where you can easily find it and add to it later.,” says Damien. That could be a notebook, a note on your phone, or a google doc, she says. She also reminds me that — for safety — no one should put personal account numbers or social security numbers on google docs.

Look, I know financial planning may seem intimidating, but what these pros are saying is that a visual can really help. Your financial portfolio could literally be a piece of paper with your accounts and assets on one side and what and who you owe on the other.

Prioritize which creditors to contact first

One of the problems I’ve faced trying to deal — or not deal — with the onslaught of unpaid bills I’m facing is that I don’t know which ones to deal with first. “You need to see what needs to be paid off most urgently,” says Ethan Taub, a California-based financial advisor.

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Deal with the bills that need to be paid soonest first, says Taub. After that, Taub recommends putting things in order of how much you owe. “If they all need to be paid at the same or similar times, go for the one that requires you to pay the most,” he says. In other words, make a list of the creditors you need to contact first chronologically and then by amount owed.

Start calling — or emailing — the people you owe money to

Most creditors have multiple ways you can contact them. The experts I spoke with for this article had different ideas about this. “I like a call because it's like the band-aid rip of dealing with debt,” says Damien. “The most terrible part — waiting to see what they have to say — is over as quick as possible.” Ugh. Yes. Also, as Anastasio points out, actually talking to someone could make negotiating easier. “Lenders and banks are well prepared to work with you,” she says. If you get someone on the phone, they may be able to waive late payments, allow you to make interest-only payments, or break up your debt into smaller installments, says Anastasio. It’s also worth noting that talking with a human may seem scary, but it can also be, well, humanizing. As it turns out, the people on the other end of the line are also people, and they may be more understanding with you if they hear your panic-stricken voice.

“If you hate the calls method, you can always ask for them to communicate with you only in writing,” says Damien. That is your legal right, she says and it is also within your rights to alert the Attorney General if they don't comply. But, she reminds us that that means that not only do you have to actively ask creditors to communicate in writing and give them an address, you’ll also have to then open your mail and deal with it. That’s a lot of steps for someone who is already a financial procrastinator, but maybe it’ll work for you.

Taub recommends email as the best way to talk to people you owe money to. “Email gives you the most time to thoroughly think through what you need to say and analyze the replies you get,” he says. It also makes it more likely that you will be able to maintain a professional demeanor, even if you feel shook. “Try to be assertive but keep it friendly. You want them to take you seriously without them taking advantage of you,” says Taub. Also, he says, if you don’t get the kind of response you’re looking for with the first person you reach, try a few different representatives, as some may be more willing to help than others.

Don’t be afraid to negotiate

Financial institutions are intimidating, especially for those of us who didn’t grow up with a lot of privilege and financial literacy. Know going into any financial negotiation that no matter how much you owe, you still have rights. First of all, you do not have to to accept you owe a debt. The onus here is on the creditor. “They have to prove you owe them and they have the right person,” Damien says.

Even if you can’t pay anything, you still have rights. But make sure they can prove you owe them before you tell them you can’t pay. “They will try to ask you for money anyway,” she explains. “This is when you negotiate.” When you start negotiating how much to pay, start small. If you need to pay $10 for now, pay $10,” Damien says. If you have a bigger fraction of the bill you can try to negotiate to clear out the debt, she adds. You can offer them half the money owed if they agree to erase the rest.

Try to think of these negotiations as an opportunity instead of a battle. The truth is that you and your creditor have something in common: You both want the bill to go away. If you focus on that shared goal, you’re more likely to work together to make it happen. Last, but not least, even if you’re talking on the phone with a debtor, you need to create a clearly traceable paper — or email — trail. “Get any agreement in writing before you pay,” Damien says.

Basically, in financial negotiations as in all other parts of life, the golden rule applies: Pics or it didn’t happen.