Debt. As you face the many challenges after a divorce you may be left with this four letter word. Many of us are panic stricken and think we have to file for bankruptcy to get out of it. Debt may have been the cause of your divorce, a catalyst, or just the result of the financial strain divorce places on your budget.  

If you have debt, there is hope and knowing that bankruptcy isn't necessarily your best option may help ease the burden. There are several ways you can tackle debt head on and knowing your options is half the battle. 

Consider going it alone-with a plan in place... The Other D-Word

You have some unsecured debt; credit cards, medical bills, maybe even a few collection accounts, that accumulated before, after or during your divorce but you are able to keep up with the payments. You may be able to manage your situation on your own.  

You can use a Do It Yourself (DIY) method, such as Debt Payment Pro. This is a FREE tool that can help you pay down your debt. Enter simple information about your debts. Based on your debts Debt Payment Pro will calculate your possible savings. Then follow your personalized repayment schedule to pay off your debt more quickly and save on interest. It can become easy to send just the minimums and not reallocate payments to other creditors. This approach requires discipline and close attention to your payments.  

Get some help-lower your interest rates and pay off debt in 3-5 years... 

Maybe you are realizing your post-divorce debt is becoming overwhelming and you can't keep up with the minimums or have fallen behind. As a result your creditors have increased your interest rates and the likelihood of you continuing to manage your debt on your own has become too much for you to handle.  

You may want to consider entering a Debt Management Plan.  Debt Management Plans, which are often called DMPs, are plans that allow debt relief providers to work directly with creditors to negotiate new terms for the repayment of your debt such as, reduced interest rates, lower monthly payments, and waived fees such as late fees and over the limit fees. With a DMP you will make one payment to a debt relief provider who will then disperse the funds to your creditors each month.  A debt management plan is a great option for you if you just need better terms and want to repay 100% of your debt.  

Settle your debt for less than what you owe but, avoid bankruptcy... 

If you find yourself scraping to just pay the essentials; rent, food, and utilities and have no money left to pay your creditors but want to avoid filing bankruptcy, you may want to consider a Debt Settlement Plan.   

Debt Settlement is an attractive alternative to bankruptcy for you if you can afford to  pay back at least a portion of your debt, but find a Debt Management Plan payment unaffordable.  

With Debt Settlement, you make monthly deposits to a Settlement deposit account in an amount you can afford. You do not make monthly payments to your creditors, and your provider works to negotiate with your creditors for a less-than-full repayment.  

When settlements are reached with creditors, settlement payments are paid from the Settlement deposit account. There are definitely pros and cons to using Debt Settlement to pay off your debt so it is important to understand what to expect.  

Filing bankruptcy may be right for you... 

While considered a last resort, Bankruptcy may end up being your only option.   If your financial situation leaves you unable to pay back even a portion of your debt, you may want to explore whether filing bankruptcy makes sense for you.  

Dealing with debt after a divorce is tough; stretched thin budgets, attorney fees, and going it alone financially speaking can take its toll. Taking the time to evaluate your options and determine what works best for you and your situation is important.  

Once you have reviewed them, begin to research companies that can provide the help and on-going support you need to get out of debt and develop sound financial habits to avoid the four letter word, DEBT in the future. 

Suzanne Cramer

Suzanne is a certified credit counselor working in our Ask the Expert forums as a coach and a Social Media Specialist for CareOne. Suzanne writes for our Divorce, Debt and Finances and A Straight Talk on Debt blogs. Follow Suzanne on Twitter where she shares the latest debt industry news and tips to keep your finances in check with her ADivorcedMom and AskCareOne accounts.