As you prepare for divorce, you’ll have a variety of concerns pertaining to your financial circumstances. And if you don’t face these concerns head-on, they could result in bigger trouble, such as bankruptcy, down the road.
Here are some things you should do before, during and after divorce to protect against bankruptcy:
- Create a post-divorce budget: This is where it’ll become clear how much money you must earn to cover all your future expenses. Accuracy is important when creating your budget.
- Don’t take on too much debt: For example, you may like the idea of staying in your family home after divorce, but this is a mistake if you can’t comfortably afford the mortgage, maintenance and other related costs.
- Eliminate debt: When possible, eliminate as much debt as you can from your life. For instance, if you have enough money to pay off credit card debt, it’s something to strongly consider. As your debt load decreases, you’ll become more confident in your ability to stabilize your finances and avoid something as serious as bankruptcy.
Divorce will affect your finances in many ways, so make sure you have a strategy in place. There’s no way of knowing what will happen to your finances post-divorce, but bankruptcy is an option should you become unable to pay off your bills.
While you want to avoid this at all costs, don’t fight it if you have no other option. You may be able to make the best of your situation by filing for bankruptcy, as doing so may give you the breathing room you’ve been seeking.