It is very common for a couple to be overwhelmed with debt, burdened to the point that the future looks bleak. Don’t lose heart, as there are some steps you can take that will help.

Of all the kinds of debt you might have, credit card balances are the worst because the interest charged is so high that you can never pay them off, you just keep paying and keep owing. Until recently, this was literally criminal, but today it’s just business in the U.S. of A.

For centuries, charging any interest at all was considered low-class and charging and more than a little was called “usury” and would land you in jail. As recently as the mid-1960’s, interest above 9% was criminal, but today law makers allow credit card companies to charge almost whatever they like, so we now see ruinous rates above 18%, 21%, even more on credit card debt. Not yet satisfied, a few years ago our trusty lawmakers made it very difficult for individuals (not corporations) to discharge their debts in bankruptcy.

Debts and what you can do about them

You are responsible for any debt incurred on a joint account that you created with your Ex and very likely (though not certainly) on any account created by either of you during your marriage, therefore . . .

Your highest goal is to make sure that paying off all debts is part of your divorce settlement.

It is NOT enough if your agreement and your judgment or decree of divorce states that your spouse must pay certain debts, because if your spouse does not pay them, you are still responsible. You need to make certain they are in fact paid off during the wrap-up of your divorce. If possible, take the debts yourself along with an extra helping of other assets so you can make sure they get paid.

If you have to sell or refinance the family home or get an equity line of credit on the home to get debts paid, so be it. The debts must be paid or they will haunt you forever.

It is best for spouses to work together to resolve debt issues. Everything will work more smoothly and to the benefit if both of you if you cooperate in this. If cooperation is not possible, then do what you can and what you must.

Steps to take

1. Close all joint accounts and any other accounts that were opened during your marriage.

2. Write to all creditors, holders any accounts of any kind that either of you held during your marriage and tell them that you will no longer be responsible for charges on that account and want your name removed from it. Keep copies of your letters.

3. Get a free credit report. The best way to find out for sure what you or you spouse owe is to review your credit report. Once each year, you are entitled to a free credit report from each of the three major credit agencies.

To get your free credit report, click here.

4. Credit and debt counselors. If you don’t have the resources to pay off all debts as part of your settlement, you should see a debt counselor who might be able to help you consolidate all your creditors and create an affordable plan to pay off your debts. Be careful! Many counselors are sharks who only want your money and won’t deliver on their promises, so it is essential to find someone reliable. If you or a friend know a local accountant or financial planner you can trust, ask that person for a reference. Interview more than one before you decide.

Reliable online resources

National Foundation for Credit Counseling. click here

About.com, Credit counseling services click here

Articles at iVillage.com

• Get your credit report click here
• Get out of debt click here
• Debt consolidation click here
• Questions to ask a Debt Counseling Agency click here
• Eight consumer credit laws you must know click here

Bankruptcy

While It is now difficult for an individual to discharge all debts in bankruptcy, it is not impossible, and there is another form of bankruptcy where all of your creditors are consolidated, restrained from harrassing you, and made part of a reduced repayment plan that is theoretically within your means. For this, you’ll need to find a reliable local bankruptcy attorney. Once again, you are better off asking for a reference from someone you trust who is an accountant or financial planner. If all else fails, call the local Bar referral service or look in the yellow pages. Be sure you interview several before you make your choice.