How To Negotiate Your Bills During COVID-19

Over the past seven weeks, 33.5 million people filed for unemployment. Some haven’t received their $1,200 stimulus checks or their first unemployment insurance checks; many people don’t have a big enough cushion of savings to cover more than one month of expenses. That can leave you in the uncomfortable position of having to decide which bills are feasible to pay and which will need to be adjusted. But the exact terms of your bills aren’t written in stone: they can be negotiated.

But how do you actually get started? If you’ve never done it before, the idea of speaking with a representative from your credit card company or bank to say, “Hey, I can’t pay these bills right now” might be nerve-wracking. Ahead, we spoke to NerdWallet personal financial expert Kimberly Palmer for the best actionable advice on how to negotiate bills.

It might seem obvious, but the first step is figuring out which phone calls you need to make and roughly what kind of assistance you’d be looking for in dollar amounts. “Focus on your essentials in terms of where you put the money that you do have,” says Palmer. “So even if your income has plummeted or gone away altogether, but you have some amount of savings — even if it's small — you can pick out a few bills to pay. You want to focus on things like food. So that's priority number one, and then your housing.”

Just securing food and housing alone might mean negotiating on those bills by calling up your landlord and asking for reduced rent or some other measure to ease your financial burden.

“And then if you know that you won't be able to pay some of your bills — say you know that you won't be able to pay your utility bill, your credit card — the first thing to do is to actually call those companies and talk to them about it, because in a lot of cases they're offering more flexibility than usual right now.”

Palmer says that most companies are not offering complete bill forgiveness — you will eventually have to pay the amount. “The kinds of things that companies are offering are things like an extended time to pay your bill,” she says. “So they might give you an extra two months, for example. They might waive any late fees, waive any interest for a period of time.”

Palmer says that credit card companies and utility companies, in particular, are offering assistance due to COVID-19 right now. “A lot of companies are saying, ‘We want people to continue having access to things like electricity and gas.’ I mean, these are very essential services,” she says. “So that's why a lot of these companies are making efforts to help consumers as much as they can by giving them more time to pay. If you haven't gotten an email outreach, that's when you want to go ahead and make the phone call to request it.”

But it’s not just utilities. Palmer says she’s also seen cell phone companies reach out and waive late fees or data fees; some are even delaying cancellation of service.

She also gives some insight on what to expect for rent negotiation. “Typically with landlords, especially if it's not a large company, it's just very much on a case by case basis,” says Palmer. “Just know that it might not be possible for them to give you exactly what you want, but if you ask for maybe more time to pay or something like that, they might be able to work with you. But there's no law that forces landlords to agree to waiving rent for a month or something like that.”

“And I want to add too, it does depend too on your relationship with the company,” she says. “If your account is in good standing, you've paid your bill regularly on time for years, that will help increase the chances that they'll say yes and they'll help you.”

You can check ahead of time to see which credit card issuers are offering what kind of assistance right now. But the information online might not be very specific; many recommend that customers reach out via phone and see what options are available to them. 

“Call the customer service line and you explain that you have been affected by the pandemic, whether it's because you or a family member has been sick or because you've been affected economically, you've lost your job or someone in your family lost your job,” says Palmer. That is really what the customer service representative needs to hear to open the door to more flexibility. So make sure you're explicit that you've had that experience, that the pandemic has directly affected you.”

“The most important thing is to just be straightforward,” she says. “You don't know if you can pay your bill this month or if you know you can't, you can say that too."

Sometimes, the response you get could vary a little on luck — who you end up talking to on the phone. But Palmer says it’s really more about emphasizing that you’re being impacted COVID-19. “In general, the customer service representatives at companies have been trained to respond a certain way to certain requests and it really depends on your wording and how you describe what you need,” says Palmer.

“There's really not. The worst thing that can happen is that they can say no,” says Palmer. “ The only thing that you do want to watch out for is with a loan — like a student loan or a mortgage — and you're calling to ask for an extension or more time, just know that interest is likely continuing to accrue. It's just being pushed down the road.” Months after federal student loans have been suspended and interest rates set to zero, some private student loan lenders are now also offering financial assistance options. But as Palmer says, most lenders are offering a forbearance — which means that interest will continue to accrue. 

In the worst-case scenario, Palmer acknowledges, negotiation might not work. And during this pandemic, typical personal finance advice might not apply. “You might just not be able to pay. And if that's the case, it can seriously impact your credit score,” she says. “But that might not be your top priority right now. You can rebuild your credit score later when you have income again. Really, the priority has to be on your essentials.”

“There's a really helpful website, 211.org, that we recommend a lot,” she continues. “Basically, it helps you in your community, finds help for things like food donations or other kinds of emergency support if you really don't have the money to buy essentials.” 

Negotiating bills, no matter how necessary, can still be nerve-wracking. But Palmer believes it’s important that people remember they’re not the only ones calling up companies and telling them they won’t be able to pay their bill due to COVID-19. 

“I would really encourage people to connect with others, whether it's friends or even people online — almost like a support group for this kind of stress, because people are under really unprecedented levels of financial stress right now,” she says. “Really the best balm for that is to talk with others who are going through the same thing and just realizing that you're not alone and it's not just you, and it's nothing that you did wrong.”