First, you should know that you are by no means alone in this predicament. Divorce drives more Americans to the edge of financial disaster than almost any other life event. The most important consideration in answering your question is whether or not your ex-wife has any personal liability for these debts. She is probably personally liable if you and she were joint cardholders, or if you live in a community property state (like California, for example).
If she is personally liable, your divorce decree should specifically say that you are responsible for paying these debts, and that you will "hold the wife harmless" against the specified creditors (or words to such effect).
Defaulting on or even failing to keep the accounts current could result in collection action against your ex-wife, and she could sue you for violating the divorce decree. However, if you are the only cardholder on these accounts, and you do not live in a community property state, she is probably not liable for the debt, and your failure to keep the accounts current should not affect her. If your ex-wife is personally liable for the debt, or if your divorce decree states that you must pay these debts, your idea of cashing in your insurance to pay the debt may be a wise decision.
If the divorce decree orders you to pay the debt, you could wind up back in court if you fail to pay and then incur liability for both attorney's fees (yours and hers) and who knows what else. With the $20,000 from your insurance, plus the $6,000 from your savings, you would be very close to paying the debt off.
You may also want to consider joining a debt settlement program, which could help you resolve your accounts in as little as two to three years, without filing bankruptcy.
Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.
Bills.com makes it easy for you to apply for qualified providers of debt help, by following this link:
I hope the information I have provided helps you Find. Learn. Save.