When you can't pay your bills

If you can't pay your bills, it is important to do something about it. Don’t put your head in the sand. Get advice about your options as soon as possible.

Here is some information to help start tackling the problem.


Work out what you owe

  • Work out what you owe and who you owe it to.
  • Write down your income after tax (either weekly, fortnightly, or monthly).
  • Work out your costs over that same time. Include regular bills such as electricity, gas and mobile phone.
  • Write down all the unpaid bills. Include all your debts and potential debts. For example, if you have a credit card, what will be payable on it next month.
  • Write down what assets or things of value you have (such as a house, car and superannuation entitlements). You may need to get advice on which assets to try to keep, or which could be sold to pay your debts.

Make a plan

If you cannot pay all the bills when they are due, what if you had more time? If you think you could pay them if you were given more time, try to work out a sensible plan to put to the people you owe money.

Need help to make a plan? See a free financial counsellor.

If you need assistance, a financial counsellor may be able to help. They can provide information and support to people experiencing financial problems.

Call the free National Debt Helpline on1800 007 007 or Aboriginal people and Torres Strait Islanders can call Mob Strong Debt Help Line -1800 808 488 for information and to find a financial counsellor.

Seek legal and financial advice first if you are considering bankruptcy. Bankruptcy is a serious step with long term consequences. There may be other options for you.

What if I receive a letter of demand?

  • This is a letter asking you to pay a debt. It is not a court document.
  • If it is more than six years since the debt arose or you agreed to pay you may need legal advice to check that the person or organisation asking you to pay is not out of time to take you to court to collect the debt.
  • Check that the amount of money demanded is the amount you owe. You can do this by asking the person, business or authority ('the creditor') that you owe money to give you a detailed account. You can check this to make sure the amount is correct.
  • If the amount is not correct you should discuss this with the creditor. If the creditor agrees that you are right, write them a letter or email when you make the payment saying out that you both agree this is the correct amount. Keep a copy. Get legal advice if you can't agree on the amount.
  • Once you are sure that the amount is correct, you should work out how you can pay the debt. If you can't pay it in full, you should work out how much you can afford to pay each week/fortnight/month. A financial counsellor can help you calculate this. It is very important that you make an offer that you can afford to keep paying.
  • Contact the creditor and make an offer to pay the debt, according to what you know can afford and when you can start. It is best to do this in writing, even if you have discussed the offer first. You should date your letter or email and keep a copy for yourself. A financial counsellor may be able to help you..
  • If the creditor accepts your repayment offer, you should write to them again confirming the arrangement you have both agreed to. Keep a copy of your letter or email.
  • Start making the payments you have agreed on.

What if the creditor does not accept my offer?

The creditor does not have to accept your offer to repay. Instead, they can choose to take legal action against you. If they are successful in their legal action it is likely that their legal fees will be added to the original amount you owe. It you receive court documents about a debt, you should get legal advice straight away.

I entered into an agreement to repay a debt but now I can't meet the repayments. What can I do?

You could:

  • Contact the creditor and try to reach another agreement to repay the debt (for example, by getting more time to pay or agreeing on a smaller amount to be paid in each instalment). If your debt is related to a mortgage, you can find more information about hardship variations on our webpage Financial hardship and mortgage stress.
  • Contact a financial counsellor for help on how to organise your income to meet the repayments or to make another plan for payment to take to the creditor.
  • Get legal advice.

If you do nothing or do not come up with a satisfactory offer, the creditor may take you to court to get the money. If they are successful, it is likely that legal fees will be added to the original amount you owe.

More information

Australian Communications and Media Authority 


Reviewed: 21 March 2024




The information displayed on this page is provided for information purposes only and does not constitute legal advice. If you have a legal problem, you should see a lawyer. Legal Aid Western Australia aims to provide information that is accurate, however does not accept responsibility for any errors or omissions in the information provided on this page or incorporated into it by reference.