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Colorado Springs Divorce Attorney – The Reality of Post-Divorce Bankruptcy

Saturday, 14 January 2012

blog-logoWe’ve all heard the horror stories from couples who have suffered great financial hardships after going through a divorce, often requiring a significant reduction in their standard of living. The realities of living separately, paying child support or losing money on a marital home are not unfamiliar to Colorado Springs divorce attorneys.  Over the last few years, many couples have either delayed divorce because it wouldn’t work financially, or they’ve suffered the consequences of post-divorce bankruptcy.

When you think about it, the fact that bankruptcy is much more common among divorcees is not surprising.  The additional cost of living separately and paying off marital debt may be compounded by job loss or underemployment.  What’s changed recently in these situations is the length of time it takes to get back on one’s feet after a financial hardship.  A sluggish job market and stagnant earnings potential have caused many divorced individuals to move in with aging parents or look for an additional source of income.  The trouble is, it is often money problems that cause marital discord in the first place, and many couples think they will be better off after the marriage ends.  In reality, many find they were far better off before the marriage dissolved.

In most divorce situations, Colorado Springs divorce attorneys find that the parties blame one another for their financial problems.  Unfortunately, this leads to an endless cycle of finger-pointing and bitterness in their post divorce life.  If there are minor children involved, continued discord between the parents just adds to their stress.

When couples meet with a Colorado Springs law firm, they often believe that a divorce will simplify their financial decisions, but unfortunately it is impossible to divorce oneself from marital debt.   Divorce may actually make things worse because each party will have higher living expenses, less free time, and a hefty share of the marital debt load.

As a Colorado Springs divorce attorney may advise you, it usually makes sense to file for bankruptcy as a couple before filing for divorce.  The main reason for this is that creditors will not be bound by the terms of your property division agreements, so if one of you files for bankruptcy after the divorce, creditors will usually look to the other one to satisfy their debts. The only way to prevent this is by maintaining separate accounts with all creditors throughout the marriage, but few couples can manage to do that.

Filing for bankruptcy before a divorce may not be an easy alternative, and will come with its own set of complications.  However, doing so will require you to work together and cooperate, which might be impossible after your marriage is over. If you are concerned about how your current financial situation could survive a divorce, or how bankruptcy could affect your property settlement,  a Colorado Springs divorce attorney can help.

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MPatMarrisonFor over a quarter century, we have helped people during what is often the darkest time in their lives. Divorce is not easy even under the best of circumstances. For most people, family is central. Having something go wrong in the family can have a ripple effect that extends beyond the home and into other areas.

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