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Ask Dave

Divorce and Big Bills

John has a lot of bills after the divorce. He's not sure which order to attack them.

QUESTION: John just got divorced, but that left him with $31,000 in legal bills. He also has $8,000 on a car note, $28,000 on student loans, and $20,000 in credit card debt. He makes $70,000 a year. Which should he attack first?

ANSWER: First thing is you said you have some stocks, I would sell those today to go ahead and pay your attorney.  After that, you're living in a house now you can't afford, so I rarely do this, but I recommend you sell your house.  The equity plus your salary should have this debt gone within a year.