It is difficult enough to watch your marriage fall apart, but it can be absolutely devastating when your finances are crumbling at the same time. According to Business Insider, divorce is the number one risk factor contributing to bankruptcy.
If you are struggling to survive both emotionally and financially, you may need to think about filing for bankruptcy to deal with your money problems. Keep reading for more details on how divorce can cause bankruptcy.
1. Less income and more expenses
You may accumulate debt after the divorce when you have the same bills to pay without the help of your former spouse. Your living expenses may double for a certain period of time following your divorce. Be careful when using credit cards to pay bills that your ex was helping you cover. Make sure you cancel any joint accounts and take out individual loans and do your best not to max them out.
2. Support payments
The court may order you to pay child support or alimony. Making these payments along with losing out on extra income can put you in a difficult spot. If you simply ignore your responsibilities, you could face contempt charges or even jail time, but discharging other debts may make it more viable for you to handle these payments.
3. Your ex-spouse declaring bankruptcy
If you do not cancel your joint debts and accounts, your ex-spouse may declare bankruptcy to relieve his or her responsibility and leave you to cover them on your own. If these debts become yours and you are unable to cover the payments, debt collectors may come after you, and you would need to declare bankruptcy to free yourself of this burden.
Marital and financial complications are both difficult and often intertwined. If you are in this situation, you may have concerns about declaring bankruptcy, but it can be your best option and give you a fresh start.