The Consequences Of Skipping Monthly Payments

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As kids, we were too eager to grow up and become adults. Now that we’re adults, we can’t help but ask ourselves, “what were we thinking back then?” Inevitably, life happened and slapped these inescapable monthly payments on our faces.

And you know what’s worse than paying monthly bills? A pile of penalty fees and unending cycle of debt, which result from skipping monthly payments.

Perhaps one of the best resolutions for the next year is to, well, not repeat the same financial mistakes we’ve had for the past years that have kept us from being free financially, like skipping monthly payments. Start the year right by knowing the consequences of skipping your monthly payments and some ways to avoid them.


Your beloved home is at stake here. A single missed monthly payment may cause your lender to begin the foreclosure process immediately which is the last thing you’d want to happen. The case depends on the lender because there are lenders who give you 90-120 days to settle before they start the process. As expected, you’ll have to pay the hefty late fees.

The late payment will reflect on your credit report, dropping your credit rating. However, there’s still hope. Kevin Gallegos, vice president of the Phoenix Operations with Freedom Financial Network says that the majority of lenders won’t report your late monthly payment to the credit bureaus until it’s been 30 days late.

Credit card

Just like a late mortgage payment, your creditor will report your missed payment to the credit bureaus if it’s already 30 days late, which will hurt your credit score big time. You’ll also have to pay the $15 late fee which can go up to $35 if you’ve been failing on payments for the past six months.

If you miss two payments, your interest rate may increase and you won’t be able to reap your credit card privileges including promotional rates on purchases, balance transfers, and rewards until you catch up.

Car loan

Charging late fees, increasing your interest rate, and reporting your late payment to the credit bureaus after 30 days are just some of the actions the lender may take for skipping¬†monthly payments on your car loan even after just one missed payment. Most lenders won’t repossess your vehicle immediately unless you fail to catch up.

Just keep in mind that not all lenders are the same. There are a lot of lenders who spare no mercy when it comes to missed car loan payments. According to National Foundation for Credit Counseling spokesperson Bruce McClary, some lenders will repossess your vehicle as soon as you miss a single monthly payment.

Utility bills

The power won’t immediately shut down after you failed to pay a single monthly utility bill. You just have to pay the late fee. But skipping monthly payments more than once and you might have to celebrate the holidays in darkness as the service providers disconnect your access to their services. In addition to late fees, you’ll also have to pay to have your services brought back.¬† Same goes with cable and mobile phone bills.

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Actions to take when you can’t pay your monthly bills

Let’s say it’s clear to you that you can’t make a payment. The worst thing you can do is to skip it. Hiding from your monthly dues will just create more damage to your savings and credit score.

If you can’t afford to pay all of your bills, here are some tips in addressing your financial blunder.

Try to earn the money you need

Dump all the non-essentials like paid memberships and subscriptions. Refrain from eating out. Avoid the shopping malls. Sell pre-loved items and goods. Go to a pawnshop. Pick up a side job. Do everything in your power to get cash and meet your deadline.


If you have more than one debt and you still don’t have enough money to cover all of the, you have decide what to pay ASAP and what bills are going to wait. List down all your debts and make every effort to pay the lenders and creditors that are likely to report you to credit bureaus – car, mortgage, and credit card. Otherwise, your credit rating will be harmed.

Paying the secured loans as well as the highest-rate debt first, like your credit card debt, is another way to save your credit score and get your finances back on track.

Call your lender/s and negotiate

If plans A and B didn’t work, just be honest. Let your lenders know that it might be impossible for you to settle your monthly payment. Then, negotiate. Don’t hesitate to ask if they are willing to offer reduced or deferred payments, extended due date, and a late fee waiver. You are likely to get approved if you have a good credit score and you haven’t had a problem in the past.

Author Bio:

Like other young adults, Carmina Natividad also experiences struggles in saving money, yet she finds a way to become a responsible spender. She shares her views on money issues by being a daytime writer for Speedy Money, an Australian-based business, providing short-term borrowing solutions.


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