Will My Divorce Lead Me to Filing for Bankruptcy?

 Posted on July 29, 2024 in Divorce

Few processes are more taxing, both emotionally and financially, than divorce. While sorting out legal fees, division of assets, and future planning, many individuals worry about whether their divorce will lead them to file for bankruptcy.

While divorce and bankruptcy are connected in some cases, it is important to understand the underlying reasons and know that a bankruptcy filing is not inevitable just because you are getting divorced. Talk with your attorney to see whether bankruptcy will be relevant to your particular situation.

Financial Problems During the Marriage

Financial issues during the marriage, such as mounting debts, unpaid bills, and financial mismanagement, are common reasons couples choose to divorce. These pre-existing financial problems often do not disappear with the dissolution of the marriage. In fact, they may become more pronounced as debts are divided between spouses.

If both individuals are struggling financially together, they might find it even more challenging to manage these debts separately, leading to a potential bankruptcy filing.

The Cost of Maintaining Two Households

After a divorce, the former couple must adapt to living separately, which can be financially burdensome. The cost of maintaining two households often includes rent or mortgage payments, utility bills, groceries, and other living expenses.

Doubled expenses can be unsustainable for individuals already budget-stretched when living together. The strain of these added costs may push some to consider bankruptcy as a way to regain financial stability.

Paying for the Divorce Itself

Divorces can be expensive, especially when they are contentious and involve court battles. Legal fees, court costs, and settlement payouts can quickly deplete bank accounts and savings. These costs and any pre-existing financial issues can create a perfect storm of overwhelming debt, leading some individuals to file for bankruptcy.

Divorce Does Not Mean Bankruptcy is Guaranteed

While financial pressures can undoubtedly lead some people to consider bankruptcy post-divorce, it is important to remember that bankruptcy is not a guaranteed outcome of divorce. Each individual’s financial situation is unique, and many people successfully navigate the financial challenges of divorce without resorting to bankruptcy.

Before deciding on bankruptcy, other avenues, such as debt consolidation, financial counseling, or working with a financial advisor, may be worth exploring. These professionals can help create a manageable budget, negotiate with creditors, and more.

Contact a DuPage County, IL Divorce Lawyer

Divorce can undoubtedly bring financial challenges that make the prospect of bankruptcy appear on the horizon. However, it is crucial to understand that bankruptcy is not an automatic consequence of divorce. For legal help in your divorce and navigating the financial complexities that come with it, contact the Wheaton, IL divorce attorneys with The Stogsdill Law Firm, P.C.. Call 630-462-9500 for a private consultation.