1. Pathways to Success Paying the Bills (lesson #11)
Many times people get into trouble and cannot pay their bills. Today we are going to learn about prioritizing bills and keeping them paid.
By Sissy Osteen, Ph.D., CFP
PowerPoint by Cindy Clampet
Revised 2017

2. In this lesson you will learn:
How to pay the bills
How to control spending
How to make good financial decisions
When you buy more than you can afford, you sometimes get into a situation where you cannot pay all your bills. This lesson will teach you how to make good financial decisions so that you control spending and then you are able to pay your bills.

3. If expenses are more than income:
You can:
Cut up and throw away credit cards
Sell unused items for cash
Eat out less
Trade you car for a less expensive one
Return items you just bought for credit on credit cards
Reduce your cell phone plan
What else can be done to reduce expenses? (list on page 2 of booklet)
If your expenses are more than your income you will need to find ways to cut your expenses. (or increase your income)
You can: cut up and throw away credit cards
Sell unused items for cash
Eat out less
Trade your car for a less expensive one
Return items you just bought for credit on credit cards
Reduce your cell phone plan
what other things?
possibilities are: turn off cable or satellite TV,
stop subscriptions or memberships and ask for a refund
car pool to work
reduce electricity and water usage as much as possible
eat less expensive food

4. Ways people might deal with too many expenses and not enough money:
Stop making payments
Consolidate loans
Work with creditors
Get credit counseling
File bankruptcy
Start a wage earner plan
Each of these choices have some positive and some negative results. We will look at each of them to see if the positive outweighs the negative. People need to be very careful when making financial decisions.
Choices people with extreme money problems have:
(read list)
All of these choices have some positive and some negative results

5. What if you stop making payments?
Could be a good move…
You will be able to balance your budget.
You will have more money to buy the things you want
You may have some time before creditors will act against you.
Could be a bad move…
You may lose the items you still owe money on
You may have utilities shut off and have to pay extra to get them turned back on.
You will have a late payment on your credit report
You will owe even more money in late charges
You may have to pay all your debts at once
You may lose part of your take home pay..(creditors can garnish your paycheck)
You may have to move
You will still owe the money
Read and discuss each slide with choices.
Use booklet starting on page 4 to answer the questions about the girl named Julie who has to decide how to handle her money problem.

6. What if you consolidate loans?
Could be a good move…
You will make just one payment
The loan company will pay off all your bills for you
The one payment may be less than all the old payments added together
Could be a bad move…
Since payments are lower, you will hve to pay longer
You may be in debt longer to make the monthly payment lower
You will be paying more in interest
You may be fooled into buying more on credit cards since you only have one payment

7. What if you talk with your creditors?
Could be a good move…
Your payment will be lower if the loan is changed to a longer time
You will be able to keep the items you bought on credit. Most creditors don’t want the items back, they would rather have the money. Smaller payments are better than no payment
Could be a bad move…
You will pay more interest if the loan is change to a longer time
You may find it hard to admit you made a mistake and need some help.
You must make the new payment. Creditors may not give you a break a second time around.
Booklet page 6—fill out bottom of page

8. How to talk to creditors
Know how much you can pay and when. (look at your budget)
Call and ask to speak to the person in charge of bill payments.
Explain your problem and if you need to make an appointment and what you need to bring
Ask to have payments reduced
Tell the creditor you want to work with him to get the bill paid
Write down the details of the new payment plan
Get the creditor and yourself to sign the new plan
Booklet page 7-9—refer to tips for talking with creditors

9. More creditor talk… Some creditors may not talk with you.
Some may not like the plan you propose. In that case, ask them for ideas as to what to do. If your payments cannot change, you still have to pay.
If you can’t see the creditor in person, write a letter, telephone or both. Tell them why you can’t pay the full bill, tell them how much you are able to send as part of the payment
Keep a copy of the letter. If you phone, keep a calm voice, and write down who you spoke to, the date, and the details of the plan

10. What if you get credit counseling?
Could be a good move…
The counselor manages your money, makes a plan and arranges your payments
You will be under less stress
You will learn how to pay your bills
You will not have to file bankruptcy
Could be a bad move…
You will lose your credit counseling help if you do not follow the new plan
You may not get the right kind of help
Before going to credit counseling find out who is doing the counseling, what is the cost and how does the program work?
Booklet page 10, show students the NEW toll-free number to find out about credit counseling
THE NUMBER LISTED IN THE BOOKLET IS OUT OF DATE. USE THE NUMBER ABOVE. AS OF 2018, IT IS CURRENT.
Have students change the number listed in the booklet on page 10

11. What if you file bankruptcy?
Could be a good move…
You will list all the people you owe money to, how much you ow, and all the property you own
Your debts will be forgiven if your creditors agree
You will have to go to financial counseling to assess your situation
You must attend money management education
Could be a bad move…
You will have to pay your lawyer before you can file bankruptcy and it can cost a lot
You may lose some things if they are sold to pay for what you owe
Your credit rating will have a bad mark for a long time.
Fill out booklet , bottom of page 11
Discuss.

12. What if you start a wage earner plan?
Could be a good move…
You will not have to file bankruptcy
You will get to keep your things while paying off your debts
Creditors will not hassle you
You will not have to pay any extra interest or late charges
Could be a bad move…
You will lose some of your take home pay
Your employer will give a fixed amount to the courts to pay your debts for you
Discuss and fill out booklet page 12

13. What would you do? Discuss what you think is the best option.
Discuss Julie’s options and what the class thinks is the best option for her problem.

14. How to keep out of trouble with creditors
1) decide which bills to pay partially or delay.
Rank bills according to what you think will happen if you cannot make a payment. Pay bills for basic needs first such as rent and electricity
2) contact creditors you cannot pay such as the credit card co.
Never miss a payment without explaining it to the creditor
3) ask if due dates can change to go along with your pay check
Pay your debts before buying anything else
Make sure the students know to prioritize bills so that essential living needs are not lost….first, you must keep a roof over your head, the electricity and water on. Second, you must have your car to get to work.
Bills after those are not essential for life and may have to be put off.
Extra charges may be charged to the person’s accounts, but at least he/she will not be on the street or without transportation.

15. Cont… 4) pay off loans with the smallest balance first
Or pay off loans with the highest interest rates first.
5) start a regular savings account to help pay unexpected
6) stick to your plan for paying bills
Do not use any more credit until you get back on your feet
decide never again to get so deeply in debt
It is important for the students to realize that paying off creditor is an important step and not getting into debt in the first place is a good plan.