Financial Problems and Divorce – Why They Go Hand in Hand And How Bankruptcy Can Help

Submitted by Rachel R on Mon, 06/19/2017 - 10:54am

Financial Problems and Divorce – Why They Go Hand in Hand And How Bankruptcy Can Help

Money woes and marriage problems often go hand in hand

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One of the most common reasons for marital problems is money. Money Magazine says that couples fight more about finances than any other issue. And when it comes to financial problems, it seems to happen that relationship problems coincide. Often one leads to the other, whichever happened to begin first. Some people say financial problems led to relationship trouble. Other says relationship problems led to the money problems.

No matter which came first, the money or the marriage problem, once both are in play, life can get very messy. Clearing up the financial problems might help save your marriage and, in that case, bankruptcy could help you deal with your money issues, and that might get your relationship back on track. Alternately, if the marital discord is so bad that your relationship can’t be fixed, using bankruptcy to sort out the money issues could turn an unpleasant split into an amicable divorce.

Either Way, Fix the Financial Problems First

Whether there’s a way to fix your marriage problems or not, there should be a solution for your finances. Clearing up your money issues should make your life easier. Unmanageable debt contributes to stress which can, in turn, strip away your quality of life. Getting out of debt can greatly improve your life, and reduce stress. Without all that weighing you down, you might be surprised that your relationship also improves significantly. Even if it doesn’t, fixing the finances is smart.

Bankruptcy can wipe out unsecured debt including medical bills, credit cards, qualified older tax debts, and other types of qualified unsecured debt. If most of your debt is only in one partner’s name, individual bankruptcy might be enough to deal with the financial problems. However, if you have lots of joint debt as well as individual debt, filing a joint bankruptcy might be the better route. The best case scenario is for both spouses to get the greatest possible debt relief for all involved.

Bankruptcy Can Clear a Better Path to Divorce 

When a marriage is troubled, and money problems are involved, divorce proceedings can exacerbate the problem. If you’re fighting over money now, splitting might cause the financial squabbles to worsen, not improve. Even a marriage doesn’t involve debt stress, splitting up can make money a divisive factor. But if you get the money problems out of the way, the divorce can be more pleasant (as much as a divorce can be) and you can have a cleaner break and a fresh start as a single person with much less debt.

If you divorce first and then try to sort your money problems, it can be more problematic. For instance, if a court orders your ex-spouse to pay your credit card debt, everything is fine so long as they do as the court says. But if your ex doesn’t pay the credit card debt as ordered, your credit score can wind up trashed unless you pay the debt instead. That’s why it’s much easier if you wipe out as much debt as possible before splitting.

It’s also important to understand that if you have joint debt and then divorce, your ex-spouse can later file bankruptcy and discharge their responsibility for the joint debt. That means, legally, you’re solely responsible for the debt. That can leave you in a bind and stuck owing not just your share of joint debts but also your ex’s share. Going back to court might help you get relief, but maybe not. Either way, it’s complicated and can be costly. Bankruptcy first, then divorce later is easier.

To find out more about dealing with debt before your divorce – or dealing with debt to try and avoid a divorce, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free North Carolina bankruptcy consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.

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