Going through a Divorce and Bankruptcy at the Same Time
Finances are one of the biggest points of contention between divorcing couples. But going through a divorce and bankruptcy at the same time can create some special challenges that debtors need to be aware of.
Below are a few tips on how debtors can successfully navigate bankruptcy and their post-bankruptcy life during and after a divorce:
Secure a Bankruptcy Attorney Who is Prepared to Protect Your Interests
Some spouses and ex-spouses foolishly depend on the advice of bankruptcy attorneys hired by their spouse or ex-spouse during or even after their divorce. Remember, while you want to amicably resolve your divorce and bankruptcy, doing so does not mean you need to put your fate into the hands of your spouse’s or ex-spouse’s advisors.
Make it Clear Who is Responsible for What After Bankruptcy
All debts are not dischargeable in bankruptcy. Student loans , secured debts and some taxes cannot be discharged in bankruptcy. If there are debts that will survive the bankruptcy process you and your spouse/ex-spouse need to decide who will be responsible for paying those debts. Whatever agreement you come to, make sure it is in writing.
Downsize Your Lifestyle
Remember, once you emerge from your divorce and your bankruptcy, you will no longer have access to two incomes. You need to downsize your expenses accordingly. Consider selling the marital home, downgrading your vehicle or cutting out unnecessary expenses after your divorce and bankruptcy.
Budget for the Well-being of Yourself and Your Family
Many people who go through a divorce and bankruptcy attempt to maintain the standard of their previous lifestyle because they do not want to disrupt the children. It’s important that post-bankruptcy debtors who have gone through a divorce budget so that they do not disrupt the well-being of their children by going through another financial crisis because they have lived beyond their means.