What makes Divorce Debt so bad?
Along with all of the other things that come as a surprise when you go through a divorce, the amount of debt that you accumulate is more than inconvenient. For many people, the divorce debt that they accumulate from lawyers, consultants, and setting up a new household can be overwhelming. In many cases, people leave the divorce court, then head down the hall and go into bankruptcy court.
The problem for many people is that hey are experiencing a huge loss of income at the same time that they have to contend with a big influx of bills. Instead of running a single household with two incomes, you now have to operate two households with one income, plus pay for lawyer fees settlement costs, and other expenses.
In order to get everyone paid, many divorcees choose to rely on credit cards. While charging household expenses and other bills can be a convent way to avoid late charges and harassing phone calls, it can be hard to work the minimum payments for those cards into your budget. As your income plummets and other obligation like alimony and child support come into your budget, then you might not be able to make those minimum payments.
Without another person’s income to rely on, it’s easy to see how a single unexpected emergency expense could put you in danger of not being able to pay all of your bills. That’s why you need to take steps to make sure that you can not only afford all of your bills, but that you can also handle an emergency without relying on your credit cards. A debt consolidation could help you with that.
With a debt consolidation loan, all of your divorce debt are immediately paid off and replaced with a single loan with a low interest rate. If needed, you can stretch out the payment term of the new loan to give yourself a monthly payment that is half or less of your current debt payments.
<p data-sp-element=”content”>With a lower monthly payment, you’ll know that you can afford your debt payments and your other bills. You’ll also have money left over, allowing you to rebuild your savings. As soon as your new house is established and you save some money, you can repay the debt consolidation early, allowing you to get out of debt quickly.