But borrowing from your retirement or 401k fund may not be the best solution to financial crisis. Remember, that prematurely withdrawing from your retirement fund also means paying the penalty and tax fees. Tapping into your 401k fund would mean losing the interest that your money is supposed to be earning.

If you have been through divorce, here are some tips to cut back your costs and reduce the risk of bad debt:

Pay attention to your spending. Obviously, you can't afford to spend your money on unnecessary things. To avoid unplanned spending, create a written budget plan and do your best to stick to it.

Change your lifestyle. After divorce, you may consider changing or making adjustments in your lifestyle. Would it be possible for you to subscribe to a lower plan such as on your mobile phone, cable, and internet subscriptions? DO you need to move to a smaller apartment? Can you give up some of your luxuries? Do you need to get a second job to help you with the bills? These changes may call for big sacrifices but it will save you from worse trouble that bad debt can bring.

Control your credit card use. Do you own credit cards? If yes, make sure that you use it only for important and planned purchases. Make it a point to pay off your credit card balances on time to avoid the interest and late penalty fees.

Talk to your creditors. Speak with your creditors to negotiate new repayment terms. Let your creditors know about your financial situation. Many lenders would give consideration especially if you have a valid reason such as having been through divorce.

Don't open new credit. This isn't the time to apply for new loans or get more credit cards. Don't use another debt to repay existing debts as this often leads to worse debt problems.

Seek credit counseling. It may be practical to seek professional help from a legal and trusted credit counseling agency. A reliable counselor can you give specific advises on how you can better deal with your finances after divorce.