Divorce disrupts your life in many ways — especially financially. Even people who were economically stable during their marriage often find themselves struggling after a divorce.
You may now be living on one income while carrying joint debt alone or dealing with expenses you never had before. For many newly divorced individuals, bankruptcy is a serious consideration to help them get on a stable financial footing.
Divorce and debt
Debt doesn’t always follow the divorce decree. Even if a divorce judgment states your ex-spouse is responsible for certain debts, creditors are not bound by that agreement. If your name is still on a joint credit card, loan or line of credit, the creditor can still pursue you for payment if your ex doesn’t pay.
This can lead to debt collection calls, lawsuits and wage garnishment long after the divorce is final. Filing for bankruptcy can stop those collection efforts and give you a way to deal with joint debt that didn’t get resolved in the divorce.
Deciding when to file for bankruptcy can also make a difference. If you are considering divorce or are currently in the process, you may want to hold off until things are clearer, such as:
- What income you’re working with
- What debts you are actually responsible for
- What assets you are keeping and what you gave up
Filing too early can complicate property division or require an amendment later. However, if you are facing immediate collection efforts or more, waiting may not be an option.
It’s essential to note that bankruptcy won’t eliminate any child support or alimony obligations. But filing can help you manage or eliminate other debt so you’re better able to stay current with your payments. Additionally, if you discharge a joint debt in bankruptcy, the creditor may still pursue full payment from your ex, which could further strain an already tense situation.
It’s not uncommon for people to file for bankruptcy after their divorce, and it’s not a reflection on your worth or effort. It’s simply a legal tool for a fresh financial start.