What is it about Divorce that brings on BK

[Flowers]

I am still trying to figure this out.
I only ask because the divorce is what did it to me.
Well, it started at the separation.
Hubby split leaving me in the home with $10,000 in monthly expenses, which he covered easily with his $500k salary. But when he left he only funneled $5,000 per month my way.
And I said OK cause I thought his business was in trouble. Attorney did her best but by the time the divorce was final 2 years later the damage had been done.
. . . fast track to BK.

What about you, did the divorce bring you here?

[Flamingo]

I have a very good friend and co-worker who this happened to (divorce and resulting bankruptcy) just as we were ending our Chapter 13 and we used to do a heck of a lot of talking about our situations until she moved out West last year to live with family.

Debt causes bankruptcy...either there was debt in place prior to the divorce or accumulated afterwards (i.e., one party had a drop in income or lifestyle and relied on credit cards to make up the difference or retain the lifestyle, or funds dried up from one spouse and the other went into huge debt getting an apartment, having the kids full time with minimum support, etc. It could be caused by a number of factors as part of a divorce situation depending upon the parties' financial and job status. Many divorces take place and there is no resulting bankruptcy. Same as to a job loss. Many people lose their jobs and do not file bankruptcy... Debt causes bankruptcy; not divorce.

[Phillymanhere]

Flower,

My former wife and I had a much more modest family income that you report here. But all the same, the divorce really set me back financially and somewhere in the back of my mind, I've been trying to sort out how and why.

Several things come to mine:

1.) The emotional devastation of divorce simply throws off our judgment and throws us into despair and sadness and most of us don't make smart decisions while in this state.

2.) Because the emotional side of the divorce is itself overwhelming and devastating, we may not do a lot of really serious financial planning as we're heading towards divorce ...

3.) This one connects to #2--often we don't see the divorce coming so we can't really plan that far ahead ..."Hey hon, I want to be ready in case we divorce. So I'm going to put aside some extra money just in case. Is that all right hon?" Not! .... In my case, I only figured out we were separating two months before we both moved out.

4.) Having planned financially as a couple for such a period of time, it's hard for divorcing folks to switch gears and plan as individuals.

5.) Spending as anti-depressant ... in my case, I ran up a ton of debt partly out of the sadness and despair I was feeling. I tried to give myself presents and fun to raise my mood.

I'm interested in what you and others have to say.

[HHM]

It is one of those weird correlations, but you are correct; anecdotally probably 1/4 - 1/3 of BK's are a result of a divorce.

But, I think it boils down to poor financial management. The couple was probably teetering anyway; thus, when you go from 2 incomes to 1, or in the case of a non-working spouse, 1 income to none, the individual cannot manage there share of the couples expenses.

Also, I think it has to do with the Divorce laws to some degree and how inequitably the assets and debt are divided and how spousal and child support are calculated (but this is not a divorce forum).

[Genenco]

It is one of those weird correlations, but you are correct; anecdotally probably 1/4 - 1/3 of BK's are a result of a divorce.

But, I think it boils down to poor financial management. The couple was probably teetering anyway; thus, when you go from 2 incomes to 1, or in the case of a non-working spouse, 1 income to none, the individual cannot manage there share of the couples expenses.

Also, I think it has to do with the Divorce laws to some degree and how inequitably the assets and debt are divided and how spousal and child support are calculated (but this is not a divorce forum).

I went to bed last night (Kind of thankful I never married but came close) and tend to agree with that having 2 incomes and then reducing that by 1 does inccur a likelyhood that a bk follows.

Of course, this also touts responsibility of both parties to be fair in such an occurance, but that's another topic and forum discussion...

[anime-chicka]

Divorce brought me to this point too. I spent 7+ years trying to pay off the debt that my scumbag ex racked up on my credit cards where he was an authorized user. I was stupid enough to not take him off when I knew I was heading down the road to divorce.

I also spent about 3 of those 7 years being unemployed and underemployed. My spiraling downfall of Robbing Peter to pay Paul started in those years. I was stupid then.

But now that things are looking up and I'm currently awaiting discharge, I know I can better myself. SO and I have already sat down and started budgeting. He's good at this stuff, so I know I'm in good hands with his help.

[Flowers]

Phillymanhere: you bring up some very good points. Especially numbers 3 & 4. I mean, was I going to pull money into a reserve for myself if something happens. I had to laugh when I read that. Also I thought when hubby left me, we were still going to try to work things out. Little did I know he'd been planning it financially for months.

Well, for me at least, this BK is very much tied to a difficult and bitter divorce. I'm glad I have my 341 soon and can get on with things.

And for those of you who have never been married - What is the #1 cause of divorce?? - Marriage.
ah ha ha ha, an oldie but a goodie.

[floridian]

the family that BKs together, stays together! well, something like that!
we should start a BK singles club... we could share lawyers and do chapter 13 outings and stuff like that...

[wonkettegirl]

Divorce brought me here. During our marriage we accrued about 30k in debt, and took out a 2d mortgage on our already expensive home to consolidate it. After the divorce, I was "awarded" our home. I simply could not afford it on my own. It's been on the market for 2 years, with no buyers in sight. Every month on my own, I went further down the debt hole, accumulating about $500 a month in debt. Now I am bk, with the marital home in foreclosure. It will be a fresh, clean start for me, and as much as I rue the bankruptcy, I am very grateful that the opportunity it represents is there for me.

If I could have sold the home, even without making $1 in profit, I would have been able to pay off my other debts. But I couldn"t, so here I am.

[floridian]

all kidding aside, the main reason that im here, is that im tired of not having a social life... this hateful little town that i live in sucks... how i got here is a long story..
the only way i could get out of here was to walk away from my home and might as well bk and start completely fresh...
i hope i dont spend next new years looking out the window at pine trees..

[Genenco]

But I LIKE looking at pine trees....

Yes, I'm in Washington...

[danaf]

I don't know BUT I can say that if my husband EVER racks up cc debt or any other kind of debt without my knowledge, then I WILL divorce him pronto. Cause' I live in a c.prop state and not gonna play that game after a successful bk. Seriously - I would up and move to Texas and let the fat lady sing.

[outofluck07]

Not divorce...

My pending bk is the result of poor financial planning in part, but primarily the purchase of a house. We put an offer on our current home in April of 2007. It seems that within the next 2-3 months, the market crashed completely. Our bank easily approved us for a "bridge" loan (VERY EVIL LOAN - DON'T EVER TAKE ONE IF OFFERED!) If we would have been able to sell the house, all would have been fine, but after sitting on the market for about a year, we had to find renters, refinance BOTH homes, then the renters stopped paying, and here we are. Luckily we refinanced, otherwise the evil bridge loan would link both properties together in a foreclosure action, and we'd be the owners of nothing. On another note, the last 2 years of the stress and hell that we have been put through have completely broken me...I don't care who knows about my bk. If they think I could have done anything different with the crappy hand dealt to me, they can shove it...