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Salem Bankruptcy Law Blog

3 tips for divorcing without going bankrupt

It is no secret that divorce can be expensive. Living on a single income, splitting assets, taking on debt from your partner and paying court fees may make it tough to make ends meet. In fact, according to one study, divorce is one of the top causes of bankruptcy.

But while divorcing your spouse may be demanding on your wallet, it does not necessarily need to make you go bankrupt. Here are some tips for ending your marriage without breaking the bank.

Why get a postnuptial agreement?

A prenuptial agreement protects you in case you and your spouse get divorced, and you sign it before the marriage. A postnuptial agreement, or a postnup, does the same thing, but you sign it after the wedding.

Why would you want to draft a postnup? If you did not feel like you needed a prenup before tying the knot, why get one afterwards?

Who owes what on a joint account?

You and your spouse start up a joint credit card account. You run up $5,000 in debt. Now you're wondering who is responsible for what portion of the payments.

Since it is a joint account, does that mean you split the debt in half? Do you owe $2,500, while your spouse also owes $2,500? How do the lenders look at these accounts?

The huge impact of excessive debt

Excessive debt can impact your life in many ways, some of which you may be well aware of when you first take on that debt. Interest rates increase what you owe, monthly payments have to fit into your budget and failing to pay off your debt causes your credit score to drop.

It's wise to consider all of these things, but you need to look at the bigger picture. Here are a few things that former college students said excessive debt did in their lives:

  • Many students were not able to buy homes when they wanted to do. Dealing with other debt meant they had to put off that purchase and continue renting or move back in with their parents.
  • Some students even had to put off marriage because of their debt. Modern weddings are not cheap, and couples who were otherwise ready to tie the knot just did not find it financially feasible.
  • Couples who wanted children also said they sometimes put it off so that they could pay off their debt first. Even with insurance, having children can cost thousands of dollars in hospital bills alone, and that's not even considering how much it costs to take care of and raise a child for years on end.
  • Students said that debt forced them to take jobs they did not want -- jobs that were not even in their field of study -- just to secure an income.
  • Some students also added that debt forced them to have multiple jobs or to work more hours than they would have preferred.

3 things to consider when telling your kids about your divorce

Divorce is a hard topic for people to discuss when they are getting ready for or are in the midst of the process. It is even more challenging to figure out how to break the news to your kids. The longer you wait to say something about the divorce in Nashua, the harder it will be for them to accept and adapt. 

It best for you to stop procrastinating and tell them. Here are a few pointers that can make it easier for you to talk to your children about divorce

Looking for hidden assets during your divorce

Are you worried that your spouse is going to hide assets during your divorce? People often do not want to split things with their spouses, so they'll try to stash certain assets and get through the divorce without getting caught -- even when full disclosure of assets is legally required.

If you're concerned that this may happen, the best place to begin looking is at home. Your spouse could have an envelope full of cash in a desk drawer, after making small ATM withdrawals for the last year, for instance.

How to protect your credit during divorce

Divorce comes with unique monetary burdens. If you suddenly become fully responsible for bills or need to worry about child support payments, you may be scrambling to afford the process. It is crucial to tackle these new financial obligations head-on or else you may find yourself falling behind.

If you fail to fulfill your new responsibilities or create your own accounts, your credit may suffer. Thankfully, there are plenty of things you can do to protect your finances and rebuild your credit during and after divorce.

High-conflict custody dispute tips and advice

You hoped the child custody portion of your divorce would go smoothly, but the reality is that you and your ex are not anywhere close to seeing eye-to-eye. You both believe you should get sole custody; your ex has even talked about trying to cut you out of the child's life as much as possible.

This type of high-conflict case can be taxing, both for you and your child. Here are a few tips to help you get through it:

  • Write down what is happening and how you feel. This is an excellent way to get your thoughts in order and even to vent without making the situation worse. You want to avoid arguments whenever possible, and keeping a journal gives you another outlet.
  • Focus on finding ways that you can help make the process easier for your child. He or she should always be the main priority. Do not lose sight of that.
  • Be aware of things you are doing to make the situation worse, and try to change them. Even if your feelings and actions seem justified -- your spouse was unfaithful, for instance, and you're still hurt by it -- remember that working to be the bigger person can help your child.
  • Be open to compromise. You may not be 100 percent happy with the arrangement, but relationships take compromise. Even though your marriage is ending, that relationship the two of you share as parents will always be there.

How to protect your credit during divorce

Divorce comes with unique monetary burdens. If you suddenly become fully responsible for bills or need to worry about child support payments, you may be scrambling to afford the process. It is crucial to tackle these new financial obligations head-on or else you may find yourself falling behind.

If you fail to fulfill your new responsibilities or create your own accounts, your credit may suffer. Thankfully, there are plenty of things you can do to protect your finances and rebuild your credit during and after divorce.

5 serious problems with debt

Debt often sounds attractive. You get this car now, but you can pay for it over five years. You can buy those concert tickets today and worry about how to pay for them next month.

Over time, though, debt really stacks up, and you may run into some serious financial issues, perhaps because of a job loss. If you cannot afford to pay off all that you owe, then you may be forced to consider bankruptcy and similar debt relief options.

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