Solving a $30,000 Credit Card Debt Problem Post Divorce

By April Lewis-Parks, Consumer Affairs Advocate

Divorce is one of the top reasons people give for why they face challenges with credit card debt. When you’re married, you overspend on credit cards as a couple without thinking about the balances. Then after the divorce when the debt has been divided and legal fees have been paid, you realize that you can’t keep up with the bills.

It’s a situation that the certified credit counselors at Consolidated Credit hear all the time. The good news is that there’s a solution that allows you to consolidate credit card bills into one payment and save thousands on interest charges. It’s called a debt management program, and it can work for you even if your credit score has suffered during your marriage or divorce.

Mary’s Journey from Overwhelming Credit Card Debt to Debt-Free

One of Consolidated Credit’s clients, Mary paid off over $30,000 in credit card debt after her divorce. A debt management program lowered Mary’s total payments by 35% and saved her over $13,000 in interest. She became debt-free in just three years and eight months. She shares her story in the hopes it can help other women and men facing similar situations.

When Mary was married, she and her husband didn’t think very much about the charges they put on their credit cards. When they needed a lawnmower, they went to Lowe’s and charged it. When they needed a place to put the lawnmower, they charged that too. Anything they needed was put on a credit card.

She and her husband always carried balances, only made minimum payments, and just let interest charges mount. It wasn’t until they got divorced that Mary saw the reality of the situation that she was in. In the process of her divorce and trying to establish herself after it, her credit card balances totaled up to over $30,000.

“When I looked at the bills, I was really angry at myself for allowing things to get to that point. What’s funny is that all that stuff is gone. The lawnmower died, the little cabin we bought to put it in rusted, so I didn’t even have anything to show for all that. But I had the debt.”

Mary knew she’d never be able to get ahead of her debt on her own. She had 12 credit cards, and trying to pay them off with regular payments was getting her nowhere. That’s when she found Consolidated Credit.

Finding Help to Resolve Credit Card Debt

A certified credit counselor helped Mary enroll in a debt management program. The program consolidated her debt into one affordable payment and reduced her average interest rate to just over 5%.

“Some of my credit cards had rates around 24% and they were knocked down to 10%. Others were 16% and got knocked down to zero.”

Mary says the program made things easy for her. Instead of juggling bills, she just made one payment to Consolidated Credit and they paid her creditors every month.

“When the first account got paid off, I was like, ‘Oh my gosh, I’m really going to do this!’ Now I don’t owe anybody anything. It has changed my life.”

Mary’s story is true: she’s a real client of Consolidated Credit who got real results. Consolidated Credit worked with her creditors to reduce her average interest rate to 5.7%. She went from paying $1,217 on credit card bills every month to paying just $794. She also got out of debt nearly 10 years sooner than she could have on her own.

These types of results aren’t unique to Mary. Balances of $20,000, $30,000, or even $50,000 happen when people face serious life events like divorce, unemployment, or medical emergencies.

Consolidated Credit has helped over 10 million people find better ways to pay off debt; they’ve helped clients consolidate over $9.75 billion in nearly 30 years.

Divorce and Debt

During the free credit counseling session provided by Consolidated Credit’s counselors, they will ask about your situation and how you found yourself faced with your current financial challenges. Understanding your unique situation helps them craft the best strategy for getting you out of debt.

Divorce is one of the top five root causes that people give for getting into trouble. Consolidated Credit’s president Gary Herman says that’s understandable.

“Divorce is one of those major life events that can derail even the best laid financial plans,” Herman says. “You have high costs that come with getting a divorce, joint debts you may inherit in the divorce, and big financial changes as a result of divorce. That can lead to a lot of credit card debt that can make it difficult to be financially resilient after divorce, right at the time that you’re ready to move forward.”

Herman says Consolidated Credit’s certified counselors are experienced in helping separated and divorced people explore all of their options for debt relief. And if it turns out someone needs help getting out of debt, a debt management program can be a cost-effective way to do it without risking credit damage. It’s a credit-safe alternative to debt settlement or bankruptcy.

“As a nonprofit service, it’s our mission to help people who have gone through a financial crisis like divorce to develop the best plan to recover,” Herman explains. “Even if you want to get out of debt on your own, a certified credit counselor can help you understand and explore options like debt consolidation loans. It’s an easy, free way to get a professional opinion on the best way to get out of debt.”

April Lewis-Parks is the Director of Education and Corporate Communications at Consolidated Credit, with more than 20 years of experience working in the financial sector as a consumer affairs advocate. www.consolidatedcredit.org

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