Rebuilding your life financially is never easy. Count on spending a lot of time and effort on this, especially if you went into debt during the divorce process. There were times when I paid my attorneys with credit cards. When the dust of my divorce battles finally cleared I was mired in debt. It took me awhile to straighten out my finances, but ultimately I was able to regain my financial health.

Have you rung up huge debts on the plastic? No matter how bad it looks, there are ways out. You just have to find the one that's most sensible and realistic for you. If you received an asset like the marital home, you could refinance it and then negotiate payoff settlements with your creditors. Usually credit card companies will only talk to you about this option after you have stopped paying your bill each month and it has gone into collection. If it's clear that you can't pay it all, most of them will settle for anywhere from 50% to 70% of the debt. But remember if you haven't been able to make payments, a large amount of what is owed is interest and late fees. You can also call your credit companies and ask them if they have any ?plans? for hardship cases. If you tell them your story, they will most likely offer you a plan with reduced monthly payments and a lowered interest rate. If you are in a position to pay your credit card bills, and your credit is still good, make sure you ask for a reduced interest rate. Take advantage of balance transfer offers for lower rates. But be careful to note when these rates will expire. Usually the interest will balloon back up. You will then need to transfer the balance again to a lower rate.

Your credit rating is the key to your financial health. Poor credit scores can raise your car and home insurance rates. I got socked with a $4,000 car insurance bill because my credit score had tanked, yet I had never been late on an insurance payment. When I wrote them explaining how my difficult divorce had lowered my credit rating, they reduced my premium. Without good credit you will pay much higher interest on refinancing your home, car loans, or any other loan. In some cases you may need a co-signer.

Divorce sent my credit score into the toilet, and at the time there was little I could do. Even when I started making regular payments and settling debts, the mark remained on my credit. Repairing broken credit takes time, but if you stick with a plan, paying everything on time, it will happen.

But what do you do in the meantime? Everyone needs a credit card for emergencies. If you do not have one the next option is a debit card. Also you might ask a close relative if they would mind making you an additional cardholder on one of their accounts. Assure them this card will be for emergencies only. Always pay for whatever you charge immediately. You can only ask this of someone you are very close to. It's one of the biggest financial favors one can do for another: putting their credit on the line for you.

If you can do it, take out a secured loan from a bank. Here is an example of how it works; you put $1,000 in a one-year certificate of deposit with your bank. The bank then gives you a $1,000 loan for one year at 9% interest. If you make the payments each month, at the end of the year you can cash your CD in and earn some interest. Current interest rates for a CD are now about 5%. This improves your credit rating because the bank will report to the credit bureaus that you paid off the loan.

When you are starting to rebuild from a credit disaster you should get a current copy of your credit report and check it for errors. Make sure any debts that were ruled to be your ex-husband's in your final divorce decree are off of your credit report. You are entitled to one free credit report per year, and you can also get a free report if you have been denied a loan, line of credit, or other financial service. You can pay for the report at any time.