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Do Not Let Your Divorce Leave You On The Brink Of Bankruptcy

On Behalf of | Oct 7, 2016 | Bankruptcy

There are many changes that a person will experience after a divorce, and it can be a very stressful situation for everyone involved. One of the biggest differences for newly divorced people is the change that they will see in their finances. They will be going from two incomes to one, and this is something that will have a significant effect on a person’s ability to make ends meet.

Unfortunately, many people do not realize this, and end up having to file for bankruptcy because they are unprepared for their new life after divorce. A recent study conducted on the consequences of divorce roughly estimated that divorced partners would typically need about a 35 percent increase in their total income to sustain their standards of living before the divorce. Understanding the possible financial implications of divorce can help you avoid being stuck in a no-win situation once things have been finalized.

One of the first things that you need to do is collect your financial information, including tax returns, before you file. This is important because it will show you exactly what you and your spouse have accumulated during your marriage. It is not uncommon for a spouse to try to conceal or withhold this information once the divorce becomes contested, so, the more you prepare for the process, the better that things will be for you in the long run.

The next step that you should take before filing is to cancel any of your joint accounts and credit cards. An angry spouse may try to steal the money that belongs to the both of you, or run up high credit card bills while the divorce is pending. If your name is still on the card, you could be stuck with these debts. If your ex-spouse stops payments, the collection agencies could come after you for these amounts.

Finally, you should pay close attention to the expenses that you will have after your divorce is official. While staying in the marital home might be important to you, you have to be sure that you will be able to afford the mortgage payments. If you are moving to a new apartment, make sure that the rent does not take up all of the money that you will have each month. You are going to need funds to run an entirely separate household, which is a major change from the way things used to be for you.

You should always work with an experienced attorney when you are filing for divorce, because it can help you have a solid financial plan for the future. If you have recently been through a divorce and are having difficulty making ends meet, discuss your concerns with a bankruptcy attorney to learn more about your options. While this may be the last thing you want to deal with, it can make your situation much easier in the long run.