Clients are our priority, we protect your rights

Divorce: Is it prompting a need for bankruptcy in your case?

On Behalf of | Jun 20, 2019 | Uncategorized

Are you one of many Florida residents who are planning to file or currently preparing for divorce proceedings? If so, you likely have a lot on your mind, especially if you have children, own a business or have serious financial concerns. It’s no secret that it costs money to divorce. It’s also no secret that not every break-up is amicable.

If your spouse is intent on gaining the upper-hand in court, you’ll definitely have your work cut out to avoid a major financial downfall as you move on to a new lifestyle. In fact, divorce ranks high on most lists regarding key factors toward financial crisis, especially issues that often prompt a need for filing bankruptcy. Most people once frowned upon Chapter 7 and Chapter 13 bankruptcy. However, nowadays many people understand that these types of debt relief can be valuable tools to help overcome financial crisis.

Unprepared to meet unexpected expenses

No matter how prepared you try to be to have funds set aside for emergencies, you can’t predict the future. Even if you have money in savings, certain circumstances may arise that throw your finances out of whack. You might be able to get back on course in some situations by adjusting spending habits or selling off a few assets. However, the issues on the following list often necessitate additional debt relief action:

  • Credit isn’t cash: While it’s understandable why you might use your credit card to cover an unexpected expense you aren’t prepared to meet, using credit as cash often leads to serious financial crisis over time. Increased interest rates from unpaid credit card balances can add fuel to the fire, so-to-speak. 
  • Divorce: Child support issues, property division, alimony, court costs and other financial consequences often makes divorce a top-ranking reason to file for bankruptcy. 
  • Sudden unemployment: If you walked into your boss’ office one day only to be told your services were no longer needed, you are definitely not the only Florida resident who has suffered financially due to unexpectedly losing a job. If yours was the sole household income, it’s likely that absence of earnings will cause financial distress. 
  • Still paying off a college loan: While earning a college degree may have sparked many employment opportunities for you, it also might have left you in serious debt. People in their thirties or forties often get stuck in financial binds when they’re unable to pay off their college loans and other adult life expenses keep rolling in. 

Most people encounter financial challenges at some point in their lives. The problem is that, sometimes, even the best efforts are not enough to get things back on track, which is why you might need to tap into additional resources to obtain debt relief and lay the groundwork for a stronger financial future.

Potential debt relief solutions

Chapter 7 bankruptcy typically includes complete liquidation of assets wherein lenders receive payment through converted values of said assets. If you have a reliable means of income, you might simply need to set up an alternative payment plan, which can often occur through Chapter 13 bankruptcy.

Each type of debt relief program includes eligibility requirements. If a Florida resident facing financial crisis qualifies, he or she may file a petition in a bankruptcy court to initiate a plan of action to discharge debt and work toward restored financial stability.