Separation and Debt

October 13th, 2011, by

Q: My wife and I are newly separated and have some personal loans from family and friends, no more than $2,000 in old credit card debt and no assets. We are seeking a service to help us develop a strategy to guide us on how to rebuild our credit and a payment schedule on our personal loans.

A: First, before the separation ends in divorce, I hope you have tried counseling.

If all hope is lost, then I hope you both have hired good attorneys. You need to draw up a separation agreement so that it’s clear who will be responsible for which debt.

It doesn’t sound like you have a ton of debt, so it should be easy to set up a debt payment plan to get everyone paid. Most importantly, contact your creditors, even your family and friends, and let them know you are trying to work though a plan to pay them back.

Go to the site of the National Foundation for Credit Counseling. There, you can find a non-profit credit counselor to help deal with at least the credit card debt. Whatever you do, stay away from companies promising to get rid of your debt. They will just charge you an outrageous amount of money to do what you can do on your own.

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Last modified: October 13, 2011 at 1:37 pm