There are very few times as a financial counselor that I’m going to tell you to NOT pay your bills. In fact, the Bible is very clear that only the wicked borrow and do not repay (Psalm 37:21). The verse you’ll hear me yell from the mountaintop is Romans 13:8, which begins, “let no debt remain outstanding…”. But there are times when paying a bill makes no sense. Let’s spend some time on that thought today.
- Don’t pay it if it isn’t yours. This may sound obvious, but the common mentality among the “average American” is to get a bill and eventually pay that bill. I’ve counseled dozens of people who pay bills that are inaccurate, incomplete, and often not even their bill! Make sure you know the bill is something you are supposed to pay before you pay it. Otherwise you might never get your money back and you might just be supporting fraud.
- Don’t pay it if it isn’t a valid debt. This is not quite the same as #1, but it is pretty darn close. The Federal Fair Debt Collection Practices Act (FDCPA) says it is the responsibility of the creditor to prove a debt is valid before you can be forced to pay it. If you have a debt that you’ve paid off but the company says you haven’t or if you have a debt that appeared out of thin air, know that Federal Law is on your side. Don’t pay that debt until the company can prove it is valid. If they can’t prove it, you don’t have to pay it.
- Don’t pay it if your budget says you can’t. The math of a budget isn’t going to change just because you have more bills than income. That isn’t magically going to increase your salary or cause other creditors to call up and say, “never mind, John. I know you’ve got a lot on you right now so don’t bother paying us for the next few months.” Ain’t gonna happen. Make a plan to pay your debts, but there may be times when your budget says you can’t afford to pay them all. Prioritize and pay things in an order that makes sense. Get to the others when you can.
- Don’t pay if you are in a crisis. When my brother-in-law fell off his church roof early this year and broke nearly every bone in his body, innumerable trees were killed simply to print all the bills they were sent from every hospital, doctor and random medical professional in the universe. Without his income and without health insurance, they were in bad financial shape. My advice to my sister during this time was to pile all the bills in a big shoebox and forget about them for now. She had a husband and two kids to care for, a job to keep, and a brother to pick on. That was plenty. Now that he’s out of the hospital and on the road to recovery, she is dealing with them at her pace. And you know what; the world didn’t come to an end. So if you’re in a crisis, don’t be desperate about paying bills, be focused on surviving the crisis. The bills can wait a while.
- Don’t pay if it is going to be messy. Yes, 2012 has been an exciting (and mostly not in a good way) year for us. With my dad’s death resulting from a car accident, he was in the hospital for about 18 hours undergoing every treatment, surgery, etc. known to man. With two auto insurance companies involved, multiple health insurances, life insurances, etc. you can only imagine how messy this whole process is going to be. The first bill we received was for dad’s helicopter flight from the crash scene to the hospital – $18,000. My brother opened it and showed it to me. With tears in his eyes he asked, “what should I do with this?” My response: “Brian, get a box and put every bill related to this junk you get in there for now. We’ll deal with it eventually, but not right now. Insurance companies have to fight it out a while first.” We’ll eventually face all those bills as a family, but I suspect most of them will go away with insurance payments and other stuff that will happen over the next few months.
As I close, let me give you a disclaimer. I will not condone you using this information as license to misbehave with money then be a punk about repaying your debts. I will hunt you down and smack you if someone tells me you didn’t pay your debts because “Barry said I didn’t have to”. God is pretty clear that you are to repay your debt. I am hopefully being equally clear that you must repay your debt. But only repay those debts that are yours, that won’t keep you from putting food on the table to pay and those you are mentally able to face today.
This post is so awesome it brings tears to my eyes.
All tips, so very true. We have friends who came to us for financial advice about a bill they received. It was $8k to replace a bumper on the car they had an accident with several months ago. It looked strange, especially since they thought the insurance companies had already duked it out and resolved the issue (they’ve since received a check for their totalled car and purchased a replacement). We told them to call their own insurance company and set the bill aside. It wasn’t their battle, it was messy, nor did they have the funds.
Great story Tiffany. Thanks for sharing it here! 🙂
Barry, This is very good advice. I too believe in paying our debt, usually as soon as I get them. But as you said in a medical emergency, you are not thinking clearly and it is better to put it away in a safe place until you are better equipped to handle everything.
You’re right – it’s best to wait until your mind clears.
Thumbs up! I appreciate the advice — never even thought about some of the scenarios that you wrote about. I’ll keep that tucked away in my brain if we are ever in any of those situations (and I pray that we are NOT).
We pray the same!
Well said Barry. I especially agree with the crisis-management approach. Sometimes it’s hard to remember these things when you’ve just had something tragic happen, so it’s nice to be reminded. Thanks.
It is often said that you teach or preach on the thing you most need to hear yourself. Definitely true with all the stuff going on in our lives right now.
wow! here i sit looking at the budget, knowing my own situation and getting nervous to the point of health issues. now this…thanks for making it seem ‘ok for now but not forever’…i may be able to breathe in the next few hours after reading this. new perspective always helps. thanks you guys ALOT!
Crisis often equals desperation. And desperation often leads to poor judgment. NEVER let emotion win over logic when it comes to money. Glad I could share a new perspective.
We are…thank you, Nikki. 🙂
What great advice, especially the section dealing with after an accident or tragedy. A person can take just so much and putting the bills in a shoebox until the insurance companies fight it out is wise.
And not to mention that people don’t make logical decisions in the middle of grief.
LOL Barry your so funny! I will be in a mess of bills here shortly also. I have been denied health insurance mulitple times and had to visit the ER. It will cost a lot I’m sure but I’d rather pay the debt then possibly die in my living room to keep costs down. I have been in debt before and I can climb back out again. Just upsets me because all we had left to be debt free was 28,000. Sigh..oh well. At least I know what is wrong with me and now I am trying to get on Obama’s pre-existing condition insurance.
Can’t fix it until you know what’s wrong. 🙂 Hope you feel better soon!!
I would love a little clarification on number 1. I only get bills that I expect ie city, electric, cell phone, etc. Is there something I need to do? to watch for? to make sure they are accurate?
Thanks.
Hey Erin, this is mostly a warning to those people who have the mindset that any bill that comes through the door is automatically theirs and correct. Especially when you are in a situation where you’re paying lots of bills and may even be in collections or similar, there are lots of “gotcha” fees that you simply don’t have to pay. When I meet with folks, I try to make sure they fully understand all the bills that come in and why they are the amount that is shown as the amount due. Not just to get the bill, look at how much it is and pay it with no consideration of what you’re really being asked to pay.
I’d like Barry’s e-book mentioned but already subscribe to Stacy’s daily. How can I get the freebie E?
Thanks.
Hi Tanya! You can download the book any time you like. Every day in your email you’ll see a little icon over to the right in the text that says: Get your free copy by clicking here!” When you click on that, it will take you to the book. 🙂
Wow, so much information and reasons I’d never even thought about! Thank you for the personal stories. I know they are hard to write about sometimes. God be with you as you continue to grieve for your loss.
Thanks for your continued encouragement toward becoming debt free and your compassionate approach in the advice you give. I appreciate you guys.
Personal stories make things seem real – we’re happy to share them. 🙂
This is the most sound advice I have heard in a long time. Especially about insurance issues. It can often take up to 6 months for insurance companies to battle it out and come up with a final real total. When I get my dental or doctors bills, I automatically put them in a pile until I see that they have fully been covered by my insurance companies. Often times, doctors misfile. When I see a claim has been denied, I call the insurance company then hound the doctor’s office until they refile correctly. It sometimes seems like I have become the billing secretary and an insurance expert but it is what I have to do to ensure a bill gets paid first by the insurance company then- what is my portion- by me.
Thank you for your excellent Biblical advice.
A lot of times it is a fight with the insurance company to get the benefits that you’ve paid for…sad but true. Best to wait it out. 🙂
Great tips Stacy!
I’ll pass that along to Barry. Thanks Danielle!