Digging out of the depths of divorce debt

Opening Credits columnist Eric Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.

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Question for the CreditCards.com expert

Dear Opening Credits,
I owe about $43,000 to my credit cards. It's all basically from my divorce and custody battles. I spent it on me and my kids just trying to get by while my ex wasn't paying any child support, and some of it went to pay my lawyer. I can pay, but I am very, very depressed. I'm back at square one. I used to have money in the bank and a house, and now I have nothing. I have no energy left. Should I just file for bankruptcy and start over? Thank you for your time. -- Marisol

Answer for the CreditCards.com expert Dear Marisol,
Divorce, especially when children are involved, is one of the most psychologically and financially draining of all life's rotten events. I truly feel for you.

That said, I strongly urge you to resist allowing your emotions (and exhaustion) to influence you to make hasty or irrational economic decisions right now. Trust me on this. Over the years, I've seen a lot of people in your position do some very strange things with their money because they are so distraught they can't think straight. For example, I have a friend who charged $3,000 for liposuction when she split from her husband because he was cheating on her. The cost of the surgery was absolutely not within her means, and when she charged more beautification purchases, her balances swelled out of control, which compounded her problems.

Is bankruptcy your best decision at this juncture, and is it even allowable? It's not possible to know without looking at all of your income, property and liabilities. However, you do say that you're able to make your payments, and that leads me to guess that discharging your debt in court might not be the right decision.

Chapter 7 bankruptcy is intended for individuals who are not simply stressed about their bills, but who genuinely do not have the earnings and assets to repay what they owe. If you qualify, you can walk away from most unsecured debts. And without those burdens, you might have enough to pay for your necessities and maybe even get ahead with savings.

This may be an unpopular position, but it isn't the credit card companies' fault that you are having financial woes. They loaned you the money with the expectation that you'd repay it. So if you can pay, I think you should. If your ex-husband is now required to make good on the child-support arrearage, I'd consider sending some of it to the lenders that you leaned on during that time.

Still, bankruptcy could be a great decision, so to know for sure, make an appointment with an accredited, nonprofit credit counseling agency. For one hour and at no charge, a trained counselor will review your entire financial picture with you. At the end of the session, they'll provide you with a personalized action plan complete with a few feasible ideas. Those might include a debt management plan where you pay what you owe through the agency, or they might suggest other options based on your unique situation and goals. If your counselor does suggest you check out the legal route, you'll be directed to mandatory bankruptcy counseling and education, and then directed to an attorney who can take it from there.

But those are your finances, what about your depression? It's almost impossible to function properly when you are beaten down. Marisol, you need support. I did a quick Internet search for "divorce" and "women" and found a plethora of organizations whose mission it is to help people overcome the brutal, strength-sapping effects of splitting up. Reach out. You are not alone.

See related: How to deal with debt after a divorce when ex-spouse won't pay, 6 financial mistakes to avoid in divorce, Avoid bankruptcy during messy divorce

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Updated: 11-23-2017