You often hear people talk about losing all of their wealth in a divorce. They worry about being broke and even about being forced to declare bankruptcy.
Are they just being hyperbolic? Are they exaggerating to make a point about how they feel they’ll lose significant assets in the divorce? Or is there actually a chance that a divorce could put you in such dire straights?
Divorce is a leading cause of bankruptcy
It is true that one of the main reasons people file for bankruptcy is because they went through a divorce. Part of the reason is that overall expenses tend to go up. Take housing, for instance. A married couple shares a house and a mortgage. After divorce, both have their own housing costs. You can also factor in property division, alimony and child support as different ways that your financial picture can change.
That said, all cases are unique. Those who have to file for bankruptcy were often facing difficult financial situations before they got divorced, and those financial woes may even have contributed to the divorce. For instance, some divorced individuals fail to pay child support and have their wages garnished. They have to file for bankruptcy because the garnishment decreases their wages. This shouldn’t be an issue if you have the means to pay child support in the first place.
Even so, this is a good example of how your financial situation can shift when your marriage ends. To prevent going bankrupt, losing major assets or seeing an unfair division of property, you must know what legal options you have. You can use them to protect your future, financially and otherwise.