Most people who go through divorce encounter a huge financial burden in the form of credit card debt. These are high interest debts and can double in short time add more to the distress. Secondly, as there is only one income it gets more problematic to deal with the credit card debts. Paying minimum amounts every month doesn't help much as only interest gets paid leaving the principal amount as it is. So, it is important to deal with credit cards head on and solve it as soon as possible.
Three solutions to deal with credit card debt after divorce:
- Consolidation - Check whether if you qualify for credit card debt consolidation. It will provide you with longer repayment durations and it will also lower your monthly installments so that you can pay it on time. Consolidation, although expensive, is an effective solution.
- Settlement - If you don't qualify for debt consolidation then you can use the services of a settlement company which will negotiate on your behalf to reduce the actual amount owed. A good settlement company may negotiate to reduce the amount owed up to 50%. The settlement may take anything from two to four years.
- Bankruptcy - This should always be the last resort as bankruptcy can bring other problems like getting future credit for as long as 10 years and can make you ineligible for many other benefits.
In addition, you should also discipline yourself financially to get rid of the credit card debt burden. Here are a few tips that can help you repay your credit card debts faster:
- Since you already have huge debts it is advisable not to use credit cards for shopping. We compulsively buy more when have to pay by credit cards. So, shop within your means and pay either with cash or through your debit card.
- Don't apply for any more credit cards. First repay the current debts. Putting more money on credit cards will only get you further in debt.
- Curb your expenses. Since now you have to live only on one income it is wise to live within your means; even if it means changing your lifestyle.
- Stop unnecessary expenses with budgeting. Make a budget and do not spend needlessly.
With a little bit of expert help and some financial discipline you would be able to repay your credit card debts at the earliest.