At a Glance

It’s much harder to pursue debt consolidation while unemployed. But it’s important to still take charge of debt management during a season of no income.

In this article, you’ll learn:

Unfortunately, debt payments aren’t paused in low- or no-income periods, like when someone loses a job or gets laid off. And for many unemployed people, it can feel virtually impossible to get out of debt with no job. The good news is that you can take steps to manage debt payments until you find work again.

What Happens if I Can’t Pay Credit Cards While Unemployed?

Relatively speaking, the implications of missing a credit card payment aren’t dire. You may see a ding to your credit score if you can’t make a full payment or miss one entirely. But failure to make payments on secured loans like your mortgage or auto loan could mean lenders may try to repossess your property.

That’s why when you’re struggling with how to pay off credit card debt without a job, it’s critical to work with creditors and prioritize what you can afford to pay. Unfortunately, that may mean you need to deprioritize debt consolidation while unemployed. Here are steps to take if you find you can’t pay off your credit cards.

Call your creditors

If you know in advance that you can’t afford upcoming debt payments, contact creditors immediately. Your creditors may be willing to work with you or give access to a hardship program that can provide short-term payment relief.

The worst thing you can do is miss payments, then notify creditors of financial hardship after the fact. Often, there’s not much that creditors can do if you don’t notify them in advance.

Make the minimum payment if you can

During times of limited income, keeping money on hand for the essentials is key. First, you’ll need to address mandatory expenses like keeping a roof over your head and food on the table. Then, if you can continue to make the minimum payment on credit cards, that’s great. But if doing so would take money away from critical needs like food or shelter, you may end up missing a payment or two if your creditor doesn’t offer support.

Apply for government aid

If you lost your job or had hours cut through no fault of your own, you may qualify for government assistance, such as unemployment benefits. It’s worth checking eligibility criteria for any programs you think are applicable and digging up any disability insurance or other benefits you may have signed up for in the past.

Assess existing debt consolidation offers

While it’s probably not the right time to apply for a new personal loan or debt credit card, it could be beneficial to review existing offers on cards you already have. For example, a card offering 12 months with 0% APR (Annual Percentage Rate) could be worth transferring debt while you’re looking for work.

Should I Consolidate Debt While Unemployed?

The prospects for debt consolidation while unemployed are admittedly less than someone with an income. Some creditors may not be willing to issue new debt consolidation loans for bad credit or unemployed individuals. Creditors may also be hesitant to issue a balance transfer credit card without proof of income. That’s because creditors want to know that you can repay the loan without issue.

If you have an excellent credit score and a strong history of on-time payments, your existing creditor could be willing to work with you to move balances to a balance transfer credit card. But since these cards often come with one-time fees, you’ll need to assess the benefit against the cost.

If you were pre-approved for a debt consolidation loan before losing your job, the lender might still issue a loan, albeit with a higher interest rate. You may also have a greater chance of being approved for a debt consolidation loan if you’re willing to put up collateral like a car or home to secure the loan.

Alternatives to Debt Consolidation While Unemployed

Debt consolidation can be a helpful tool to simplify and streamline debt repayment. But the odds of qualifying for an unemployed debt consolidation loan may be slim. In that case, you may need to consider alternatives.

Work with a Non-Profit Credit Counseling Agency

A non-profit credit counseling service is worth considering if you need financial support while unemployed. Credit counselors can help negotiate with creditors on your behalf and can help manage your monthly debt payments as part of a larger debt management plan.

One potential downside of working with a non-profit credit counseling agency is that you may be asked to close credit cards as part of a broader debt management plan. In turn, that can decrease your length of credit history and cause your credit score to go down. But if it helps to repay debt and establish better money management skills, the temporary dip in score could be worth it.

Related article: How Does Non-Profit Debt Consolidation Work

Debt Settlement

Many debt settlement companies claim to get rid of debt for a fraction of what you owe. But often, they do this by not paying the debt for a period, then negotiating with creditors to settle for a lower amount. While you may be able to save on how much you’re paying to creditors, there are often fees that go to the debt settlement company, plus your credit score could plummet.


Bankruptcy is generally a last resort. If you think you can secure a job in the coming months, there’s rarely a reason to consider bankruptcy. It can be costly to file for bankruptcy, not to mention that it can take up to 7-10 years to have it erased from your credit report.


How do you pay off a credit card if unemployed?

If possible, continue to make minimum credit card payments while unemployed. Then, as soon as you get a new job and are back on your feet financially, increase payments to pay off debt more quickly. If you can’t afford even the minimum payment, it’s important to work with creditors in advance of the missed payment to see if they’ll offer short-term assistance.

Can I consolidate debt with no job?

Lenders often like to see proof of income before issuing a debt consolidation loan. That means it could be challenging to consolidate debt with no job. However, if you’re willing to use collateral like a home or car to secure the loan, lenders may be more willing to consider it since they can recoup some of their losses by seizing your property if you’re unable to pay it back.