Divorce and Parenting Hardships Leading Parents to Bankrutpcy

Filing bankruptcy is a big decision that will have financial consequences for the long term. However, for many people, it is the best decision to get a new, financial start. When families experience challenges including divorce and parenting hardships, this can lead to bankruptcy especially when the family has a significant amount of debt.

What Leads to Bankruptcy

Bankruptcy occurs when an individual or married couple determine the financial burden is too difficult to manage. Individuals can file for bankruptcy for any amount of debt, and risk losing some assets during the process. There are many reasons why divorce and parenting hardships can lead to this difficult decision about bankruptcy.

During the process of divorce, assets and debts are divided among both parties. However, one party may not have the financial means to repay some of the debt or may fall behind in the process.
Individuals not receiving spousal support or child support can easily fall behind on financial responsibilities, leading to divorce.
Maintaining a home with two incomes is far easier than maintaining a home with just one income, especially after divorce. Now, there are two people and two homes to manage on the same amount of money.
The emotional toll of divorce can lead to bad financial decisions, including over spending on credit cards.
Some individuals may not have a good credit score coming out of the divorce. This can cause difficulties with obtaining affordable loans.

These are just some of the reasons that parents may find themselves facing bankruptcy. However, there are other solutions to consider prior to this, including debt settlement. For those considering the benefits of applying for bankruptcy, it is critical to take into consideration the long term consequences.

Both Chapter 7 and Chapter 13 are common types of bankruptcy for parents to file after dealing with financial hardship stemming from a divorce and parenting. Individuals who have an income and have assets may wish to consider Chapter 13 rather than Chapter 7. In either situation, bankruptcy can help to give the individual a fresh financial start to their lives after these life changing events occur.

Hiring an Attorney

Anyone considering divorce should hire an attorney. An attorney will provide the individual with guidance on all of their options for repaying the debts they owe or filing for bankruptcy. An attorney can also provide guidance throughout the process to ensure that the procedure goes properly and that the best financial outcome is obtained.

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