Choosing Between Divorce and Bankruptcy
In many marriages, financial problems are a major source of stress and put a strain on the relationship. When money problems cause severe conflict, some couples may logically try to make a decision between bankruptcy and divorce.
If the marriage is otherwise strong, bankruptcy may be an option to relieve money concerns and ease marital discord. Chapter 7 bankruptcy may allow a couple to have most unsecured debts discharged and get a fresh start, while Chapter 13 reorganizes debts for people who own larger assets they wish to keep. If money is the root of marital problems and the couple can make it through the stress filing for bankruptcy may bring, they may be able to avoid divorce.
However, if problems in the marriage are not rooted in finances, or have spread far beyond money woes, bankruptcy may not repair the relationship. When money is not the primary cause of the decline of a relationship, filing bankruptcy may do little to help. Additionally, if one spouse feels the other is the cause of the financial hardships, bankruptcy may follow the divorce.
If after a couple divorces and one ex-spouse decides filing bankruptcy is the best option, then the other ex-spouse may be forced into bankruptcy as well. Debts and assets are divided during divorce, but if a debt is owed in both names, both parties are legally responsible.
If bankruptcy relieves one party of the debt, the other may be fully responsible for payment. After divorce, many people struggle to pay debts and having an additional burden can force them into bankruptcy.
So if you’re having financial problems that are causing big marital problems, which do you choose – divorce or bankruptcy? It’s worth the time to think about all of the issues carefully and calmly discuss the options with your spouse, even if the subject of money generally provokes an argument. You may even seek the advice of a legal professional. Connect with a local divorce lawyer to learn more about your options and possible outcomes.
Learn more about divorce and finances.
August 10th, 2009 at 4:00 am
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