Struggling financially? Ask for help.

If you’re struggling financially and dealing with the resulting stress, you’re probably less alone than you think. And if you’re making ends meet, there’s a good chance you have friends or family who aren’t.

A 2017 report from the Federal Reserve found that in 2016 almost half of all Americans didn’t have enough savings to cover a $400 emergency.

Admitting that you’re treading water can be hard.

As financial psychologist Brad Klontz told The Atlantic, “You are more likely to hear from your buddy that he is on Viagra than that he has credit-card problems … much more likely.”

All the same, simply asking for help is the first step to saving your finances.

Signs that you may want to ask for help

“Sometimes people don’t reach out for medical attention until their health problems are severe and difficult to resolve,” says Bruce McClary, vice president of public relations and communications at the National Foundation for Credit Counseling. “When it comes to financial issues, the scenario can be very similar.”

Here are some warning signs that it may be time to reach out.

1. You have no money left over in your budget. If you have so little wiggle room in your budget that you can’t afford to pay more than the minimums on your debts or save anything for later, something might need to change.
2. You don’t have any savings at all. When you have little to no savings, even a minor financial emergency can cause a downward spiral for your finances, McClary says.
3. You’re behind on your debt repayments. You should never feel that you’re too far gone to ask for help. Explore your options if your financial burden starts to feel unmanageable.

Don’t wait until your financial situation is so dire that you can’t keep it to yourself anymore. McClary says that the earlier you reach out for help, the more options you may have. This is because the more delinquent you become, the less access you may have to some options.

How to negotiate your bills successfully

If you find yourself falling behind on your bills, there are steps you can take to ask for help.

1. Reach out

If in doubt, try asking hospitals and vets for a payment plan, talking to your student loan provider, asking for a loan-modification program for your mortgage, or whatever else might help you get your finances back in order. Your creditors might not say yes, but you never know until you ask.

Before jumping on the phone, try to have a clear goal in mind. Do you want a new payment arrangement? Are you asking your creditor to forgive part of your debt if you settle the remainder?

2. Don’t wait

You may be more successful if you reach out sooner rather than later.

“I encourage people to have proactive conversations with medical billers and creditors as opposed to waiting until it’s too late,” McClary says. “I can speak from firsthand experience: Creditors, medical billers and debt collectors may be more likely to work with you if they don’t have to hunt you down and pry information out of you.”

3. Keep asking questions

If you don’t like the options your creditor presents, keep asking questions to potentially unearth a better solution. For example, some creditors might lower your interest rate for a limited period, such as six months, to give you a break.

4. Know your own limitations

Negotiating with one or two creditors is one thing, while juggling four, five or six creditors is quite another. When you start to feel overwhelmed, McClary says, it may be time to seek the help of a professional who can help you streamline the process.

Where to turn for financial support

There are some people who prey on those in dire financial straits. Because of this, Certified Financial Planner™ Cary Carbonaro recommends working only with nonprofit credit counseling agencies.

“I have seen negative consumer experiences with for-profit agencies,” she says. “They sometimes try to make money off the back of people in debt rather than helping them change behaviors and trying to make sure this debt doesn’t happen again.”

To help you determine whether you’re speaking to a legitimate agency that charges reasonable fees and has your best interests at heart, the Federal Trade Commission offers a list of questions to ask.

“Look for an agency that offers a complete budget review and a review of all your credit,” McClary says. “Some can help you work with your creditors to find a repayment plan. And many nonprofit agencies also offer student loan and housing counseling services in a way that’s confidential and objective.”

Nonprofit credit counseling sessions generally last less than an hour and could be free or low cost. If you participate in a debt management plan (in which a credit counselor works with you and your creditors directly to figure out a payment plan), you could face an initial fee as well as a monthly fee.

The pros and cons of settling your debt

Settling a debt typically means negotiating a reduced payment that’ll count as paying off your account. This is an attractive option because it means ditching a debt for less than you owed originally, but debt settlement still has the potential to hurt your credit.

With debt settlement, the account may be reported as “settled,” which is better than being delinquent but not the same as paying in full.

“Debt settlement could be a good idea if it’s your only option other than bankruptcy,” Carbonaro says. “But you have to solve the underlying problem of how it happened, or it could happen again.”

In addition to the potentially serious hit to your credit, settling a debt might mean getting stuck with an unexpected tax bill. The forgiven portion of your settled debts could be “reported as income, so you may have to pay taxes to the IRS on that settled amount,” McClary says.

If you do pursue debt settlement, consider whether you can handle the tax bill.

Also, settling a debt means you’ll still need to pay the remaining portion. So if you owe $5,000 and negotiate a settlement for $2,500, you now owe $2,500.

On top of that, debt settlement is also an area chock-full of scams and ineffective third parties.

“There are a lot of debt-settlement scams out there, so you really need to do careful research before working with a company,” says Wang.

For the most part, McClary doesn’t recommend settling debts, because of the likely negative impact on credit scores, the potential tax bill and the money required up front.

But if you’ve considered carefully and are interested in debt settlement, he strongly recommends you handle it yourself rather than use a third-party negotiator.

Bottom line

If you’re struggling financially, ask your creditors for help and know your options.

And at the end of the day, it’s important to remember that there’s another person on the other end of the line, and often one who’s willing to help you get back on your feet so you can afford to make payments. After all, your creditors don’t gain much if you can’t pay back what you owe.