What is Bankruptcy?
This is a proceeding in a court of law where the assets of a person in debt are liquidated and therefore the debtor is relieved of more liability. When a person is bankrupt, it means that they are unable to make their ordinary payments. People get into such a situation because of mismanagement of money or certain occurrences whose damage cost a lot of money leaving the victim in a great debt.
When a bankruptcy case is filed in a court of law, it stops the debtors from further harassment by the creditors. Before the petition is made, the debtors are using their credit card to pay for utilities, purchase gas and food and paying the credit debt to continue living. However, the debtors are not paying for the car, the house or for other secured debts.
When Do People Consider a Divorce?
Although the credit card debt is settled eventually, money runs out. Most divorce victims after a bankruptcy fail to communicate appropriately and instead blame each other for their financial situation. Debtors are in a very bad shape at the stage that they start consulting their attorneys to escape bankruptcy and for divorce.
Communication between the Couple Dies Off
During the post-petition, credit card debt is settled and the debtors are able to make utility and house payments and settle their daily living expenditure on time. They continue with the lifestyle of extra holiday trips, movies and going out for meals without any communication with their spouses about finances. The stress grows and debtors continue to wonder why living a good life is not possible without an income increment. While bankruptcy does not actually cause a divorce, lack of proper communication between couples about their real financial status will.
Does Bankruptcy Work?
The first thing to do to ensure bankruptcy works for you is to analyze the actual reason why you are indebted. Some occurrences such as a natural catastrophe can leave you in a great debt. Another cause of debt might be a higher spending per year than the actual amount you earn that year. Once you have identified the source of your debt, you will start to make financially healthy changes.
Discussing the debt with your spouse is very important in case you are married. Being in debt may mean that you are going to forego several movies and holiday trips. You may be unable to buy some commodities when they are needed at home or even spend 500 dollars on your child’s birthday. Details about your spending habits and the debt should be open to discussion if you want to save your marriage.
Some financial problems that cause bankruptcy may lead to divorce. If bankruptcy has arisen because of mismanagement, the filing of bankruptcy itself indicates that the fundamental conditions of financial decisions and communication are very poor, which may lead to divorce. Bankruptcy can be an opportunity to a brilliant financial future when used appropriately but may also lead to divorce and financial despair. You can avoid it by taking efficient control of your financial status and ensure that it is founded on a stable ground.