How to Eliminate Debt From Divorce

Getting divorced can be devastating to your finances. Instead of relying on two incomes, you now have one -- but you may still have the same house payment, electric bill, loan payments and credit card bills. Eliminating debt like credit cards and loans can help you stay solvent after a divorce, but paying that debt off may seem impossible. A few wise financial strategies immediately after divorce can keep you afloat and get your credit score back to where it should be.

Instructions

1

Sell any joint assets you own or refinance the debt so that it is in one person's name. If you left the martial home but your name is still on the mortgage, then you are legally responsible for the mortgage payments even if your name is no longer on the title. Selling assets like real estate can give you the cash flow you need to pay off debts.

2

Pay off joint debts first. Don't rely on your former spouse to make regular payments; if he doesn't, both credit scores will be hurt. Come to a mutual agreement about how much of the joint debt you are both responsible for and then ensure the debt is paid.

3

Transfer debt to one person if you can't afford to pay off joint debts. For example, use a credit card in your name only to transfer the debt from a joint account to a single account.

4

Get a consolidation loan, either through your bank or through a credit counseling service. If you go through a credit counseling service, the temporary ding on your credit report while you pay down your debt will be better than having multiple accounts in collections.

5

File bankruptcy as a last resort. Bankruptcy can eliminate debt and give your finances a fresh start. The consequences of filing bankruptcy can be severe, so make sure you talk with a bankruptcy attorney about your options before filing.