Money troubles are a common stressor that can contribute to or accelerate a person’s divorce. The current job market means that many people are out of work and families are being stretched very thin financially. Some couples may resort to racking up credit card debit, ceasing car/house loan payments and borrowing beyond their means in order to make up for this deficit. Many times these money troubles are also indicative of the imbalances in the relationship. You must make a strategy for getting out of your marriage and salvaging your finances.
Timing is the key
Divorce and bankruptcy are two incredibly stressful life events, made more challenging when they coincide. Depending on your situation, the timing and order you file for bankruptcy and divorce are very important. For most people, doing both actions at once can needlessly complicate your situation. In some areas, even if you file for both proceedings simultaneously, one may take precedence over the other. Here are some of the scenarios that may affect what order you file in:
Bankruptcy before divorce: If you can work cooperatively with your spouse and file for bankruptcy jointly, this could be financially beneficial. Getting this out of the way beforehand can make the divorce process more efficient. Unfortunately for many couples, this process would require that you stay married until the bankruptcy filing is complete.
Bankruptcy after divorce: For spouses that need to get out of the relationship as soon as possible, the choice is clear. Even though bankruptcy for a person filing as an individual may be more costly than jointly as a couple, the benefits of getting out of a toxic relationship may be more critical.
Preparing for a better future
If you’ve been supporting a spouse, the result can be dire financial straits for the both of you. You must weigh the emotional cost of staying in the legal relationship of marriage versus your bankruptcy filing’s economic benefits/costs. If you’re considering a divorce and have outstanding debts, explore the options for pursuing both legal processes.