I’m Separated and Can’t Afford My Previous Credit Card Debt. What Should I Do?


Dear Steve,

I have separated and have no assets except a 2006 Chevy SUV. I can afford my rent and one loan, but I can’t afford the credit card debt I piled up.

Should I file for bankruptcy would be the third time, first though in this new county, or just stop paying?



Dear Tom,

Filing for bankruptcy a third time is what it is. From what you said, it sounds like some significant transitions in your life, especially moving between countries.

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Separation or divorce is another life event that causes financial upheaval. When you take a combined household and split it apart into two, what was affordable can suddenly be unaffordable. You now have two housing payments, etc.

I believe the key here is for you to meet with a local bankruptcy attorney, discuss your current situation, and come to an informed opinion if bankruptcy is right for you.

I also think you should reflect on why the credit card debt was run up. There are many legitimate reasons, but you need to see if some of that spending was on wants versus needs because you were in a bad spot. It’s easy to self-medicate with spending.

At the very least, you can learn from whatever you decide was a mistake and get some value out of this stressful situation.

Data and statistics demonstrate it would be much better to file for bankruptcy quickly than just defaulting on payments.

You should read this data from the Federal Reserve, “Those That File Bankruptcy Do Better Than Those That Don’t .”

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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