If you can’t pay a bill, it might seem better to send in what you can than to send nothing at all.
That’s probably a waste of money. Your creditor may cash the check, but that doesn’t mean you’re not considered late.
“Don’t assume that any payment you make will buy you more time or prevent damage to your credit scores,” NerdWallet columnist Liz Weston says. “You need to talk to the creditor. See if you can work out a payment arrangement that will keep you from being reported as late to the credit bureaus and having the account turned over to collections.”
If you are considering making a partial payment:
Lastly, be strategic about your bills if you can’t pay them all in full. Necessities such as rent and food and perhaps transportation are higher priority than, say, student loans or credit cards or debt collectors.
Here’s a look at how much breathing room you have on different types of debt:
|Debt||Real trouble starts in||Potential consequences|
|Mortgage||90 to 120 days||Foreclosure, loss of home|
|Auto loan||1 day past due (though many lenders wait 60 days)||Repossession, collection of unpaid debt|
|Federal student loans||270 days||Wage garnishment, tax refund seizure, partial seizure of Social Security benefits|
|Private student loans||30 days||Lawsuit, wage garnishment|
|Credit cards||180 days||Account charged off, sold to collections|
|Collections accounts||Depends on amount, aggressiveness of collector||Lawsuit, wage garnishment|
|Tax debt||10 days after IRS sends first notice demanding payment||Wage garnishment, property or bank account seizure|
|Child support||Varies by state||Driver's license suspension, tax refund seizure, passport revocation, wage or benefit garnishment, property liens, jail|
|Medical bills||Depends on provider||Account turned over to collectors|
This article first appeared at NerdWallet.