A fresh start in the new year: Filing for divorce and bankruptcy

A number of people struggling financially take steps toward improving their lives at the start of the new year. This can involve divorce, bankruptcy, or both. While no one looks forward to bankruptcy or divorce, the result of these difficult processes can be extremely beneficial in the long-term.

Most people choose to wait until after the holidays to file for bankruptcy and divorce. In January, there is typically an influx of divorce cases. January has become known as “divorce month” for this reason.

When bankruptcy and divorce are appropriate

When is bankruptcy right after divorce? Three common reasons are below:

  • Financial struggles are a reason for the divorce. Financial arguments are a leading cause of divorce. Financial goals and spending habits are important. Major differences can lead to irreconcilable arguments, as well as overwhelming debt. Filing for bankruptcy after divorce can be a way out.
  • You rely on two incomes. If you stopped pursuing a career to focus on raising a family or simply need two incomes to pay bills, bankruptcy can help you start to life on your own without overwhelming debt.
  • There is debt you were unaware of. If a spouse ran up credit card debt, failed to pay taxes, or otherwise misrepresented their true financial situation, bankruptcy after divorce can be a vehicle to avoid lasting debt. Even if you were not aware of the purchases or debts, you may still be subjected to creditors depending on the type of debt it is. Bankruptcy can help.

The right path for you

It is fairly common to obtain bankruptcy protection after divorce. Of course, the right path will depend on your individual circumstances. For those looking to get out from a bad financial situation, however, getting both a divorce and bankruptcy protection can be the start to a new personal and financial life free from debt and overwhelming stress.

This blog is not legal advice. If you are considering either divorce or bankruptcy, speak with an experienced attorney who understands both divorce and bankruptcy prior to undertaking either.

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