Does Divorce=Bankruptcy?

It’s common for people to hear that other couples lose all their wealth after a divorce. They worry about going broke and having to file for bankruptcy.

Hearing this can leave people questioning if they are exaggerating about losing a significant amount of assets in the divorce? Or if divorce leaves people in such dire conditions?

Fact: Divorce IS one of the leading causes of bankruptcy

Yes, it’s true. One of the main reasons people file for bankruptcy is after going through a divorce. A big reason is that their expenses go up. Think about a married couple sharing a house/mortgage; once divorced, both have their housing costs. This added on top of asset division, alimony, and child support; a couple’s finances can get hit hard after the massive shift in financial responsibility after a divorce. Those who find themselves in a difficult financial situation before the divorce are more likely to file for bankruptcy. In some cases, the financial struggles are what kickstarted the divorce. 

Unfortunately, it appears that divorce rates and the financial challenges faced by divorcing couples are on the rise, placing married couples at a higher risk for both divorce and bankruptcy. However, experts say it’s difficult to determine which factor is at the root of the problem. For many of the couples at risk for divorce, bankruptcy often becomes a necessary evil once a marriage has ended.

There are almost equal numbers of men and women that file for bankruptcy. Over the last couple of years, we have seen the gap between this shrink. In fact, married couples still make up an increasing portion of bankruptcies, around 64% in 2010. That number includes married couples filing jointly. Additionally, 17% of debtors are single, 15% are divorced, and 3% are widowed.

These are good examples of how your financial situation can shift when your marriage ends. To prevent going bankrupt, losing a significant asset, or seeing an unfair division of property, you must know what legal options you have. Call our offices today to get a free consultation where you can get all the legal advice you can get. Our experienced family law attorneys at Burton Law can help ensure that you will not file for bankruptcy after a divorce. 

Disclaimer: Using this site or communicating with Burton Family Attorneys through this site does not form an attorney/client relationship. This site is legal advertising only. Do not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services providers. If you have any specific questions about any legal matter, you should consult your attorney or professional legal services, providers.