Question:   Credit card debt counseling didn’t help. My spouse and I just separated and we are in extreme debt. Is it wise to file bankruptcy at this point?

Answer:      If you have tried financial credit counseling and it has not worked, do not give up. Filing for personal bankruptcy should only be considered as a last option.

When credit card debt counseling does not have the desired effect, you cannot simply give up and walk away from your creditors. You are well aware of this if you are deep in debt and receiving daily, or perhaps hourly, phone calls requesting payment from creditors or collection agencies.

But first let's look at the most important part of your question. Take a moment to think of why you and your spouse separated. Is it because you could not handle the stress of being in debt? Did you refuse to take the advice provided during personal debt counseling? Did you constantly argue over money issues? Was one of you a big spender who was unwilling to change bad money habits?

After considering some of those questions, ask a few more. Did you both make an effort to get out of debt? Did you come up with a budgeting program together and stick with it? Did you support one another during these tough times?

Debt management counseling addresses more than just your money issues. It's clear that having a solid relationship can help bolster each person when things get tough financially. Both of you are still in extreme financial debt, and that is a problem that can create a feeling of being completely overwhelmed. Feeling alone and unsupported just makes a bad situation worse.

Now that you are separated, it may feel even more difficult – you may be feeling abandoned. Try to stay calm. Consider what you were told during credit card debt counseling. Now is the time to apply what you learned.

Regardless of what your spouse is doing, have YOU worked on a new household budget yet? Have you trim unnecessary spending? Have you cut up your credit cards to ensure you won’t fall further into debt?

Knowing where your money has gone and planning for precisely how your future monies will be spent is the best thing you can do to limit fear and worry. Just as you were told during the credit card debt counseling sessions... it's time to begin taking back control over your personal finances.

Any reputable consumer credit counseling agent will tell you that wallowing is self-pity and dispair won't get your anywhere. Actively planning and doing something productive will crush feelings of helplessness and provide you with additional confidence that you will overcome these financial challenges.

Once you are back in control of your finances, you’ll be in a better position to support your spouse and perhaps even begin to repair your damaged relationship. So if you haven't done so already, begin credit card debt counseling as soon as possible and get the ball rolling.

Chances are you are not actually bankrupt at this point. Most people who are in debt do have the ability to work themselves out of it if they are willing to take the hard steps that are necessary to stop the bleeding and reverse their poor spending behavior.

Bankruptcy should only be considered when you have no other options left. A knowledgeable debt management counselor will advise you to avoid bankruptcy as long as you can because it severely damages your credit report and limits future opportunities.

Bankruptcy will remain on your report for a minimum of seven years, which will be a major problem if you ever need to get a car or home loan – even as far as 10 years into the future.

Work with your creditors in a pro-active way in order to come up with a better payment plan. They want their money, and many creditors will be willing to work with you in order to get it – particularly if they believe you are willing to do your part.

Use what you have learned at credit card debt counseling and continue to learn from other outlets such as this website.

Free debt counseling may be available in your workplace or at a local church. Be sure to ask around if you feel you need more assistance.

As you begin to take ownership of your financial issues, do the same with the issues in your relationship. See if you can reconnect with your partner. When he/she sees you being positive and taking some initiative to solve the problems that face both of you, you might begin to see a way of repairing your marital issues.

» The lottery is my debt settlement program! I’m feeling lucky! After I win the lottery, what should I do with the windfall of cash?
You should never, ever, rely on sheer luck as your plan for paying off your debt. The lottery is nothing more than a way for government to take in more of your hard earning money.

» I recently reported a stolen credit card, but just found out my spouse took it and didn’t tell me. I’m thinking about leaving the marriage, what should I do to protect myself?
The fact that you reported a stolen credit card will work in your favor because the bank will shut down the account the second they are notified.

» What do you consider a bad debt loan? We want to have children and it appears that adoption is our only choice. Can I take out a loan to pay for the adoption?
Never pay on credit when you know full well that you need to pay cash to ensure your financial future and continued prosperity.

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