Strategies to Negotiate and Pay Bills During COVID-19

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Last Updated: 6/24/2021

The coronavirus crisis continues to have a profound impact on the nation’s economy. Unemployment numbers are up, and so is the number of Americans unable to pay their monthly bills.

With unemployment claims at record highs, plenty of Americans have bills coming due that they may not have the money to pay. There are some resources that can help.

Reach Out to Creditors to Negotiate Bills

A man with a baby girl in his arms reaches out to his creditors on his cell phone.

Before you pay a single bill, reach out to your creditors and tell them you’ve been affected by the coronavirus and ask them what hardship programs they have available.

“You just have to call around and see who's offering those programs,” says Bruce McClary, vice president of communications for the National Foundation for Credit Counseling.

Go line by line through your budget. With every bill, call customer service and tell them how you’ve been affected by the coronavirus and ask for help. You may be allowed to skip one or more payments or make a partial payment.

Ask to Pause Loan Payments

A woman sits on her living room floor while speaking with her mortgage company on her cell phone

Mortgage companies are offering three months of forbearance on mortgage payments,” says Katie Bossler, a financial wellness expert with GreenPath Financial Wellness. This may not apply to all mortgage companies, but homeowners who have mortgage loans backed by Fannie Mae or Freddie Mac, along with V.A., FHA and USDA loans have been given relief through the CARES Act.

Fannie Mae and Freddie Mac loans can be eligible for up to 12 months of forbearance. Additionally, some states have spelled out additional relief for homeowners in those states. Some auto lenders and credit card companies are pausing payments as well, Bossler says.

Those paused payments may help you get on some solid footing with your creditor, but make sure you understand the details of any arrangement you make. “Although there is help out there, know the details of the help,” Bossler says.

Ask what your payments will be after the forbearance period ends. Will they go back to normal, or will you be expected to make higher payments? Find out where your account will stand after the relief period has ended. It is best to know in advance what is coming.

Negotiate Medical Bills

A man discusses his medical bills over the phone.

If you’ve got medical bills related to the coronavirus, or if you’re not able to pay existing bills due to missed income during the coronavirus, you can reach out for payment assistance from your medical care provider. Let them know your situation and ask if they have a payment assistance program or “charity program.” These programs are typically for low-income patients. Each hospital sets its own low-income threshold, but it’s usually based on state or federal guidelines.

If your income is more than the limit, you may still be eligible for some type of special financial aid due to the coronavirus situation. Hospitals and doctor’s offices are used to dealing with patients who need to negotiate medical debt and will usually offer a payment plan that won’t put a further strain on your budget. They have also been known to accept a percentage of the final amount if you’re able to pay it all at once or in a few payments.

Utility Bill Negotiation

A couple looks at a computer to see how they can save money on utility bills

Don’t forget to call about essential utilities such as water and electric services. By reaching out, you may be able to skip a utility payment, McClary says.

“Not every utility company is going to be offering the same kind of hardship assistance. It varies from utility company to utility company and from state to state,” McClary says.

Find out what kind of hardship programs are available from your water and electric services. A couple of phone calls may be all that is needed to get some utility bill relief. Cities such as Austin, Texas, are offering utility relief for citizens experiencing financial difficulties due to the coronavirus.

Before you stop making payments, be sure to call the utility companies and let them know your situation. If you stop making payments without letting them know what’s going on, you may end up with your water or power service cut off, which renders a home unlivable.

A Budget Can Help for Bills You Can’t Negotiate

This is also a good time to re-examine your budget or create one if you haven’t already. Are there bills you can trim or cut out altogether? Even if you temporarily have to do away with some goods and services, you can pick them back up again when life gets back to normal. “People are buckling down to the essentials,” Bossler says.

Cut the Cable Cord

A family of 4 watches a movie on their streaming movie service

This may be a good time to trim your cable bill, which can be almost $200 a month for some households. You need to keep everyone entertained while they’re sheltering in place, but could you make do with HULU, Netflix, or some other streaming service instead?

Every little bit helps, and you need that money to pay for your housing, food and medical bills and essential utilities such as water and electricity. “We advise people to suspend and cut (cable TV) at this time, if you’ve lost a job,” McClary says.

If you can’t live without some cable T.V., why not negotiate a lower cable bill with a more affordable cable package? A little less cable will save you some much-needed money.

Trim Internet and Cell Phone Service

A small child wearing blue glasses looks at something on the internet

You probably can’t completely cut internet and cell phone service. These days, both of those items are a necessity for most people rather than a “nice-to-have,” like cable. But you may be able to negotiate cost here and cut the amount you’re paying monthly for both of those services.

According to Consumer Reports, at least 60 communications companies have agreed to honor the FCC’s “Keep America Connected Pledge,” which promises to protect and keep internet service going to Americans who are experiencing financial hardship as a result of the COVID-19 crisis. Huge internet providers such as AT&T, Charter, Comcast, Cox and Verizon, along with dozens of others, have introduced consumer-friendly policy changes that can help you keep your essential internet service during this time.

Can you and your family get by with a more affordable package? Even better, will your service provider offer some payment relief because of your financial hardship due to the coronavirus? Call and ask them.

Questions to Ask Creditors

A woman sits at her kitchen table while she speaks with a creditor and takes notes

As you negotiate your bills, be sure that you understand the terms and rules that come with any payment deferrals or forbearance.

For credit cards, ask if you will still be charged interest or late fees on your account. For mortgage payments, ask if your mortgage payment will go up after the forbearance period ends. Find out where your accounts will stand after the relief period has ended. It is best to know in advance what is coming.

These are all things to discuss with a customer service or accounts payable representative. Make sure the details are clear before you agree to the deal.

About to be late with a payment? Call before you are late and strike a deal for reduced or paused payment. It is always better to negotiate with a creditor before you are late. “Be proactive. Don’t wait until you’ve already missed a payment,” McClary says.

In addition to calling customer service, check out the company’s website. There may be an application to fill out for assistance.

Tips to Stay Persistent and Positive When Negotiating

A man works on paying his bills

A few tips can go a long way when you start contacting companies about bill negotiation.

  1. When you reach out to each creditor, lender and utility company, be sure to take notes on each relief plan and partial payment that you agree to. Note the names of people you talk to, along with dates and times of each conversation.
  2. Every partial and skipped payment helps. The companies you’re working with appreciate your diligence, and you’ll have less to catch up on when COVID-19 quarantining has ended.
  3. Even if you have some payments deferred, you’ll eventually be expected to pick them up again. Work on a plan for doing just that.

Stay proactive, persistent and positive. These tough days won’t last forever. When it’s over, you’ll be glad you made and put into action a plan to pay your bills.

About the Author

Lucy Lazarony is a freelance personal finance journalist for MoneyGeek living in South Florida. Her articles have appeared in Motley Fool, Forbes and MSN Money. Prior to freelancing she worked as a staff writer at for seven years.