How to pay your bills after a lay off

If you've lost your job, managing your credit card bills, car payments and other debts suddenly comes with a question mark. The worst thing you can do is to give up and just hope your creditors forget your phone number. That can lead to nasty financial consequences, including late fees, a lower credit score and possibly even a lien or repossession.

Even if you can't rely on a steady paycheck, you can take control of the situation and make sure smart fin financial moves — including making sure to stay on top of your doubt.

CNBC Select shares simple but powerful steps to manage the most common forms of debt, even if you're temporarily out of a job.

After a layoff, many people cut back on how much they put toward credit card payments. Making just the minimum monthly payment is a short-term strategy that keeps your account in good standing and helps avoid late fees and penalty APRs.

But it also keeps your credit utilization ratio high and take longer to clear your balance.

A balance transfer credit card with a 0% intro APR period can help you bypass some of those interest charges for up to two years. The Wells Fargo Reflect® Card has one of the longest 0% intro offers on the market and doesn't come with an annual fee.

Because credit card debt is unsecured (meaning it's not tied to collateral like a home or car), you could also look into a debt settlement company, which will negotiate with your lenders to lower your balance. (Secured debts, like a mortgage or car loan, don't qualify.)

Debt settlement companies can shrink your debt by 50%, but the fee for their services can be as much as 25% of the enrolled balance. Your credit score will also take a big hit, so make sure it's financially advantageous in the long run before signing up.

Pacific Debt Relief has earned high customer review scores on Trustpilot and an A+ rating from the Better Business Bureau.

If you're still on the hook for federal student loans, contact your servicer about changing your repayment plan. An income-driven repayment plan could allow you to pay nothing each month, depending on your income and family size. You can also request deferment or forbearance

If you have a private student loan, you have fewer options, although SoFi, Sallie Mae, College Ave*, Ascent, and Earnest all offer hardship forbearance. Even if your lender doesn't, ask about a reduced monthly payment plan, at least temporarily.

You could also consider refinancing to a lower rate or making only the minimum monthly payments until you find a new job.

Unlike student loans and credit card bills, your car loan is secured debt. So, if you don't keep up with payments, the bank can repossess it. And repossessions have been surging in the past several years, reaching more than 3 million vehicles in 2025.

Contact your lender about your job loss and see if they can help find a solution, whether that's smaller payments, a new payment date or a short deferment. If your financial situation has changed for the long term, ask about a loan modification to adjust your term or interest.

If your credit has improved or rates have dropped since you took out the loan, you might consider refinancing.

A mortgage has more flexibility with payments than other kinds of debt, but once again, your first step is to contact your lender. That may be your mortgage originator, or increasingly common, a mortgage servicer who took over from your original lender.

If you have mortgage protection insurance (MPI), your policy could help you continue making payments if you've lost your job.

Certain government-backed mortgages offer protections in the event of a job loss. Loans through the FHA, USDA, Fannie Mae, Freddie Mac and Veterans Affairs usually offer forbearance or some form of loan modification that reduces your monthly payments.

If you have a conventional mortgage, you can still refinance, take out a home equity loan or HELOC or (depending on your age) apply for a reverse mortgage to cover expenses.

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*College Ave's student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term