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The correlation between divorce and bankruptcy

| Aug 18, 2019 | Uncategorized

Strained finances can push any couple over the edge into divorce territory. Financial stress is one of the most-cited reasons marriages end.

It is not a surprise that the divorce process itself can lead to a worse financial situation. What was once difficult with two people may now feel impossible with just one. If you were part of a two-income household, the cut of one entire paycheck may make digging out of debt hopeless. Bankruptcy is becoming more common among divorced people.

Legal costs can quickly get out of control

Some divorces proceed along a nice timeline, while others can take much longer to hash out. The emotional strain may cause people to argue and fight over every element of the divorce. When couples choose to argue during the process, attorney fees may rise substantially. Therefore, coming out of a divorce with less money and more debt, including legal expenses, may make it difficult to get back on firm footing sooner rather than later.

A solo life is not necessarily cheaper

You may look forward to having more control over your money after divorce and believe that being single will put you in a better financial position. While some of this is true, you may quickly learn that single life is not necessarily cheaper. Depending on where you live, the cost of living may prove higher than you once thought, and many expenses may start to pile up.

Your marital debt gets split

Along with splitting assets, couples must also split up marital debt. Even if one person made substantially more, each usually gets a share of the debt accumulated during the marriage. If you find yourself saddled with debt that you cannot afford to pay, the stress can make even the most fiscally responsible person consider bankruptcy.

Divorce and bankruptcy are similar in that they may offer a way out of a bad situation. When considering filing for bankruptcy after your marriage ends, you may want to speak to an attorney who can help you decide what works best for you.