Dear New Frugal You,
Very simply, I am in high credit card debt and cannot meet the monthly payments along with regular living expenses. Single mother of one son. Went through a divorce in 2006. Ex-husband has not taken care of any of his portion of the debt. Since all the credit is in my name, I am primarily responsible. Total credit card debt is about $60,000. I make a good salary of $95,000, but have a mortgage of $2,500 per month and private school for my son at $500 per month. I need help! Any advice will be appreciated. -- Overwhelmed


Dear Overwhelmed,
Debt and divorce go together far too often. Sometimes the debt causes the divorce. Other times, the divorce causes the debt. Either way, you're looking to find a solution.

So what are your options? You can beat on your ex to pay more. You can look at your expenses to see if some money can be reallocated to paying your debts. Or you can enter credit counseling.

Let's begin by looking at your situation. First, the income: Since you didn't mention where you live, we'll assume that your combined federal and state income taxes are 30%. That would leave you with take-home pay of $66,500 per year or $5,541 per month.

We'll also assume that your $60,000 in credit card debt requires a minimum monthly payment of 5 percent. That's a high minimum, but it's not unusual if you're falling behind. That would mean a $3,000 minimum payment each month. Combine that with your mortgage payment and your take-home pay would be eaten up entirely by just two bills. (See the minimum monthly payment calculator to refine my ballpark guesses.)

You mention that the credit is in your name. The credit card companies will continue to hold you responsible. Even if your ex fails to meet his obligations to you, any failure to keep up with your payments will be reflected in your credit score.

So what are your options?

Help from the ex. First, you can try to get your ex to pay his share of the debts. Good luck. He's already ignoring a court order to pay you. Short of the state garnishing money from his paycheck, you're not likely to see a steady, dependable amount.

A side note for those getting divorced. Make sure that your finances get divorced, too. Just because a judge says your ex must pay a certain amount on a credit card doesn't mean that it'll happen. And, if it doesn't, you'll have a hard time enforcing it. You don't want to get stuck between your ex and a creditor.

Downsizing. Reducing expenses is a real possibility for you. Begin with your home. In your situation, you should be spending much less for housing. If you can, refinance. If you can't, consider sharing the house with another single mom or put it on the market.

You also need to re-evaluate whether you can continue to keep Junior in private school. Your son's education is important. But your debt may remove private school as an option.

Credit counseling. Counselors can arrange a lower minimum payment and lower interest rate for you through a debt management plan. Choose a firm that's a member of the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. Your ability to apply for additional credit will be limited while you're in a debt management program, but that's a small price to pay for lower minimums.

You'll probably need to use all three tools to dig out of debt. Expect it to take a number of year, but those years will go quickly as your debt declines and you begin to feel financially independent.  

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