How to Pay Off Multiple Debts

Debt—especially debt from multiple sources—can quickly become overwhelming. Divorce, which usually means a lower household income, adds another challenge. To figure out your next step, start by estimating your future income, post divorce, and then calculating what you can afford to pay along with the risks you are willing to take.

Refinancing your home to absorb the credit card debt would almost certainly reduce your monthly interest payments. A rate in the mid to high teens, such as 17 percent, is not unusual.

Your mortgage rate, on the other hand, would be around 5 percent, at least temporarily. By folding the high-interest credit card debt into the mortgage, you could save hundreds of dollars a month, says Michele Noble, a mortgage specialist at Bank of America Consumer Real Estate.

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