What to do when you're late on your bills

This is day three in a series 30 Days to Start. This week we are focusing on the process of getting out of debt.

Last week I got a heart-breaking email from a reader:

We are behind on everything. We are drowning in debt and our monthly expenses seem to be going up. I really don't know how much longer we can make it. Help!

There is so much I want to say to anyone dealing with this. I know it is a time of stress and emotions and it is beyond overwhelming but NOT insurmountable.  Today I want to give you a few tips on getting past this season.

1. Don't panic. First things first. DO NOT PANIC. This is a time that is deeply emotional and huge life choices should not be made during times of extreme emotions.

2. Stop spending money. If part of your issue is credit card debt then do not keep swiping your credit card. Do not use it as tiny rectangular shovel to dig yourself deeper in debt.

Don't use your Citi card to put gas in your car, don't swipe it at the grocery store. Stop using it. This is only going to drive you deeper in debt and keep you dependent upon the cycle of debt. Break the cycle. 

3. Make a list. Just like you would make a to do list on a hectic day, make a priorities list of how you should spend your funds.

  1. Food/medicine
  2. Basic utilities like water, electric, and gas
  3. Rent/mortgage
  4. Gas to get to work
  5. Your creditors and other debts

Focus on your family's immediate needs first. Don't pay off your credit card and have your lights cut off.

4. Contact your local utility providers. If you are so far behind that you're in danger of getting your power cut off, call your electric company or water authority and see if there is something you can do.

IF you are going through a legitimate hardship there might be a grant program or discount available to you.

5. See if there is anywhere you can cut back. I know it might already feel slimmer than slim. But see if you can shop your pantry for a few days. Then create really simple meals.

You might have to cancel your cell phone or find a ride to work.

6. Find extra income. This might be a time to consider freelancing, take on some babysitting or clean houses. It's not glamorous but desperate times call for a little creativity.

7. Call your creditors. This isn't a last resort measure, but I do put this low on the list because you have to take care of your pressing needs first.

Understand that this is a debt you incurred, but ask if you can devise a payment plan to get current.

Things to remember:

Don't fall trap to lies creditors might tell you. No uniformed office if going to show up to where you work because you didn't pay your Citi bill.

They can't garnish your wages without a court order. This is another lie creditors tell. But in order for there to be wage garnishment, there is a legal process and you will be made well aware.

Here is a great article on what to do if a creditor is lying to you.

What about you? What are some steps you would take in that situation?