Divorce and family law disputes don’t just affect emotions; they can also impact your finances. Sometimes, the financial toll becomes so serious that it leads to bankruptcy.
It is important to take a balanced approach when assessing bankruptcy. Below are some correlations between family law matters and bankruptcy.
Court costs and legal fees
Family law matters can be expensive. Divorce, child custody disputes and alimony disputes often involve multiple court appearances and legal filings. Paying court fees and managing other costs can soon drain your savings. The longer the case drags on, the higher the financial cost.
Dividing assets and debts
In a divorce, both assets and debts must be divided. This can mean selling property or cashing out retirement accounts. You may also become responsible for joint debts, even if you didn’t run them up. If you suddenly have less income and more financial responsibility, it can be hard to stay on top of it, especially if you’re also paying child support or alimony.
Post-divorce income and outgoings
Life after a divorce often comes with big changes. You might need to move, find a new job or cover more bills alone. Over time, credit card balances, loans and unpaid bills can spiral out of control.
If you’re facing financial hardship after a family law matter, help is available. Tackling debts proactively can prevent them from getting out of hand. You may also be able to restructure them in an affordable way. Bankruptcy is a possibility, although it’s wise to seek legal guidance before entering this process.