I am overwhelmed with debt and bills from my divorce. What can I do?

Keeping Your Head above Water after Divorce

Life after divorce can be stressful, with trying to adjust to your new life without your ex, and perhaps helping your children adjust as well. Getting a handle on your bills may seem like just another item on your overwhelming “To Do” list. But putting it off can lead to sleepless nights and expensive mistakes.

You have no doubt heard the adage, “How do you eat an elephant — one bite at a time.” This problem is also one you can tackle one bite at a time.

Step #1 –	Get Organized: Create a space for taking care of your bills and financial documents. Buy stamps. Get a file folder. Create a “bills” folder on your computer, or better yet, set up online bill pay for as many of your accounts as possible.
Step #2 –	Know What You Owe: Get a clear picture of what you owe by making a list of your debts, the interest rates and the minimum monthly payments. An online system like EverydayWealth can make this task easier, but if you don’t have one, start with a simple notebook.
Step #3 –	Get the Big Picture: Track your spending for a few months to get a clear picture of where your money is going. Keep a small notebook with you at all times and jot down purchases as you make them. Then transfer them to a daily or weekly spending worksheet.
Step #4 –	Get a Game Plan: Once you know clearly what your income must support in terms of expenses and debt payments, you can decide whether you can cope with your debt on your own, or whether to get help. Here’s the rule of thumb: If you can make all the minimums plus $50-$100 extra per month without running up new balances, you can likely pay off your debt using an accelerated debt payoff strategy. If you can only make the minimums, you are using cards to pay your living expenses, or you are borrowing from one card to pay another, you need to seek help. Depending on your situation, you may want to talk with a credit counseling agency, debt negotiation firm, or even a bankruptcy attorney.
Step #5 –	Stay Positive, But Be Realistic: Many people make costly mistakes in an effort to keep the collectors at bay, or to protect their credit ratings. These include raiding retirement funds to pay credit card bills or tapping home equity when they really can’t afford it. Don’t rush important decisions about your future. Feeling overwhelmed about financial issues after divorce is common. Take things step by step so you can move forward with confidence.

Gerri Detweiler is credit expert for Everyday Wealth, an online service offering a confidential accelerated debt pay off solution that does not hurt your credit. She is also author of The Ultimate Credit Handbook and host of an Internet radio program, EverydayWealth Radio: Your Consumer Advocate.

I am overwhelmed with debt and bills from my divorce. What can I do?

Getting a handle on your bills may seem like just another item on your overwhelming “To Do” list, but this problem is one you can tackle one step at a time.