Many people who get a divorce worry about how they will pay off debt in post-divorce life. You may feel especially concerned if you depended on the income of your spouse during your marriage. Even if you feel confident about getting a job, you should still consider how to minimize your future liabilities.
The Motley Fool goes over some options divorcees may use to reduce their debt. These methods include reducing your existing debts as well as making sure you do not incur burdensome liabilities going forward.
Refinance your loans
If you worry about falling behind on current loan payments, you might see if you can refinance your loan so you can pay less per month. A lender may allow this if you have good credit and a stable income. Still, you will likely incur more payments over time, so think about whether you can handle an extra year or two paying off your loan.
Transfer your credit card balance
Mounting credit card debt along with interest is a problem for many people. Getting a balance transfer card could be of benefit. This option allows you to transfer your existing card balance onto a new card with a lower interest rate. Check the terms of the new card as it may require you not to make any purchases on it.
Seek a cheaper living arrangement
Your home may cost you a lot of money in upkeep and property taxes over the long run, so if you do not need a large home, you might look for a smaller house to live in. Downsizing your living space can cut utility bills and taxes. Also, if you choose to live in an apartment, you should not have to worry about lawn care.
Remove yourself from joint accounts
You probably share ownership of different accounts and liabilities with your spouse. Before your divorce is complete, you should take steps to cut your ties with these joint accounts. Getting out of a jointly owned credit card can prevent you from sharing any more debt acquired by your ex.
There are many different ways to handle debt depending on your situation. Making sure you are on sound financial footing can help you make long-term plans for your post-divorce future.
