For a segment of society, the financial burden caused by a divorce can be catastrophic. Between paying legal fees, alimony, child support, setting up two separate households, the financial accrual of debt may cause bankruptcy. Sometimes bankruptcy filing becomes an almost certainty due to the immense legal implications and extraneous expenditure involved in the process.
For other individuals, countless years of unaccounted debt creates constant stress and conflict that ends marriages, causing divorce. If you’re stuck in a dangerous position of considering both bankruptcy and divorce, it can be helpful for you, in the long run, to understand whether filing for bankruptcy before or after divorce could yield better results for yourself and your child. Efficient planning can make both divorce and bankruptcy much less complicated.
Here are some reasons why many people divorcing also file bankruptcy
It becomes imperative to calculate the overall costs that may arise when filing for divorce. The cost of divorce has countless factors, such as the division of assets, debts, and finance controlled by either party individually or jointly. The cost of legal fees, changing residence, traveling to meet children can all add up. Many individuals are never truly able to fathom the expenses of a divorce, and they end up losing big in the process.
Nature of Relation between the Parties
Usually, a healthy relationship between parties leads to a better settlement and less legal battering. Certain parties may be combative or collegial. The nature of the relationship between the parties will act as a factor in the divorce. Sometimes divorce may be through mutual consensus and rationale, but when there is malice or loathing involved, the divorce may get ugly, and lawyers will fight for every penny. In the end, one party may stand to lose more than the other.
Lack of Experience & Knowledge
Most individuals never really predict the possibility of divorce, and when it occurs, it hits them bad. As the saying goes, ‘by failing to prepare, you are preparing to fail,’ you must understand the stages of divorce, the time that is taken, and the financial as well as the mental strain that it takes on you. It is always good to understand the implications and ramifications of divorce before and while in marriage. Lack of experience can cause the burden of unplanned expenses to pile up and put you in neck-deep financial trouble.
Trial V/s No Trial
Costs of going to trial are enormous. Sometimes avoiding litigation may mitigate expenditure, but when settlements and mutual accord are not attainable, trial may be the only means to simplify the discord. Having a trusted attorney with experience is always good because divorce proceedings have a multitude of issues that individuals may have difficulty understanding. A bad lawyer can cost you big, and the losses might cause you to file bankruptcy, so choose wisely.
Beyond bankruptcy, drainage of wealth from your kid’s college fund, unaccounted-for expenses, miscellaneous costs, and time expenditure, bankruptcy can occur if you aren’t precautious. A job of a lawyer is also to mitigate costs that may lead to bankruptcy.