Divorce is an extremely difficult life situation to face, with emotional as well as financial stresses. In fact, the financial impact of a divorce can sometimes be so severe that it leads to the necessity of filing for bankruptcy.
While not all divorces necessarily end up in bankruptcy filings, there is a significant number of people who do end up having to file for bankruptcy due to the financial hardship brought on post-divorce. Here is some more information about how divorce can sometimes lead to the need for a bankruptcy filing, and ways to mitigate the situation where possible:
How divorce can lead to bankruptcy
Finances can be one of the most contentious parts of a divorce. When one spouse is less economically independent than the other spouse, that lack of financial independence can lead to difficult complications after the divorce. In addition, facing life as a newly single person means starting over on several fronts, many of which can be costly, such as setting up a new home.
Couples are able to reduce their expenses by sharing them, and as a divorced person, expenses that were once shared are no longer so. Living on one income rather than two can push a person who was already stretched into a situation in which he or she is no longer able to pay monthly debt bills.
How to know if it is time to file for bankruptcy
It is not always easy to know exactly whether filing for bankruptcy is necessary. There are several indicators that can show up to lead the way, however. One of these is when monthly debt has built up to a point in which bills have gone unpaid for a significant enough amount of time that creditors have resorted to harassing. Filing for bankruptcy stops creditor harassment.
Opting for bankruptcy can also help a divorced person avoid having to pay for an ex’s debts. In addition, the longer a person continues to miss debt payments, the worse his or her credit record becomes. Filing for bankruptcy stops that credit record deterioration and allows a person to get started on building a fresh financial future.
Divorce can put a person at a significant risk for financial hardship. One way to help mitigate the stress and difficulty of overwhelming post-divorce debt is to consider filing for bankruptcy to take the first step towards rebuilding.