How divorce and bankruptcy are related

On Behalf of | Apr 8, 2023 | Bankruptcy

Some people who go through a divorce file for bankruptcy at some point. Thus, these two processes may be related. Some factors from your divorce may push you to file for bankruptcy sooner or later in your new life.

The following discusses how this can happen:

The party paying spousal and child support 

When the court orders you to pay spousal and/or child support, you will essentially be in debt, and your ex-spouse will be the “creditor.” You should make the determined amount on set dates. Failure to do so, you will be in debt. Examples of reasons that can lead you into this situation are: 

  • Changes in income (Loss of income, demotion or incarceration) 
  • New responsibilities in your life (marriage, the birth of a child or establishing a business)

Some people take loans to pay spousal and child support, but this can worsen the situation. With time, it can be hard to manage your expenses, fulfill court orders and pay your loans. Thus, it will be best to request a modification. And if the new order is not relieving as you thought, you should file for bankruptcy.

The party with new bills

If your ex-spouse used to handle most of the bills, you may find yourself in debt after the divorce. This is because you will have to make payments you didn’t before, and your income may not be enough.

Further, if your ex-spouse can no longer afford to pay child support, leaving you to handle the kids’ expenses, you may also get into high debt, which can push you to file for bankruptcy. 

Divorce can lead to bankruptcy, and vice versa is also possible. If you are in debt after your divorce, you may need to consider filing for bankruptcy to stop wage garnishment orders and calls from creditors.