There is no doubt that financial problems can strain a shaky marriage to its breaking point. If you are struggling financially and also find yourself gritting your teeth just to get through the holidays with your spouse, it might be time to have some hard conversations with your wife or husband.
But you want to have a strategy. Below are some suggestions for how to plan for two major changes in your life — bankruptcy and divorce.
Which comes first?
There are tax consequences to filing as either married or single, so now is a good time to loop in your financial adviser (if you don’t have one, put aside some cash for a basic consultation). They can review your financial situation and advise as to whether it would be to your advantage to file for bankruptcy before divorce (or vice versa).
Do you really want to divorce?
If you file for Chapter 7 bankruptcy jointly while married, many of the financial pressures that have been bearing down on the two of you will disappear. Could that be enough to save your marriage?
Only you and your spouse can make those critical decisions, but it might be worth it to try to save the marriage, especially if young children are involved. Of course, the bankruptcy credit counseling and financial management course that debtors are required to take online before their debts are discharged is no magic solution to fiscal irresponsibility. If you have a spouse that fritters their income away, you may indeed want to legally sever yourself from them and any future insolvency.
Ultimately, when these issues collide, it may be wisest to seek legal guidance.