Many of those filing for bankruptcy cite divorce as the primary reason for the filing. Divorce can be costly for a variety of reasons. Typically, a divorce involves one household splitting into two, which means two rent or mortgage payments as well as the loss of other economic efficiencies of marriage. Considering court costs and similar expenses, the divorce process itself can cause a certain amount of financial hardship. After the divorce, one spouse may be strained by alimony or child support payments. Debt issues during the marriage may have even been a sources f marital conflict that led to the divorce in the first place.
While the conventional wisdom is that divorce rates have been falling, a new study says that a harder look at the data shows marriages are more unstable than ever. With your likelihood of divorce at a historic high and considering the slow economy, the intersection of divorce and bankruptcy could be very relevant to your individual circumstances.
When age-adjusted, divorce rate has risen dramatically
Previous data suggested that after a peak in the 80s, the divorce rate has been on the decline. But, a new report from the Minnesota Population Center at the University of Minnesota indicates that this may be false, based on incomplete information. It was only in 2008 that a series of marriage and divorce questions were added to the Census Bureau’s American Community Survey, and since that time, the data has painted a portrait of a national divorce rate that is not falling.
Authors of the new paper say that the divorce rate has not actually dropped since 1980, it has only leveled off. And, when they accounted for demographic bubbles in the age of the American population, they discovered the age-standardized divorce rate grew substantially – by 40 percent – since 1980. The age-standardized divorce rate is an important factor in calculating divorce risk, because the U.S. had a younger population in 1980, and younger couples generally are at higher risk of divorce.
Even so, the study pointed to huge numbers of divorces among older Americans as a driving factor in the high overall divorce rate. “The Baby Boom generation was responsible for the extraordinary rise in marital instability after 1970,” said the University of Minnesota study. “They are now middle-aged, but their pattern of high marital instability continues.” Since 1990, the authors say that the divorce rate for those age 60 to 65 has tripled, while for those over 65, the increase has been fivefold.
Depending on circumstances, bankruptcy may be better either before or after divorce
Couples are facing higher odds of divorce than ever, and if financial concerns are also an issue, bankruptcy might be in the picture as well.
In some instances, it can be advantageous to file for bankruptcy before divorce. By eliminating debts, bankruptcy can simplify the divorce settlement process. Filing a joint bankruptcy can also save on court and legal fees.
On the other hand, incomes typically go down after a divorce. While you might not qualify for bankruptcy prior to divorce, it is entirely possibly that you will afterwards.
The best way to determine if and when bankruptcy should be part of divorce is to discuss the matter with an experienced attorney. Remember to tell your lawyer that both divorce and bankruptcy are on the table in order to avoid potential conflicts and get the most out of either type of filing. Get in touch with an attorney today if you are facing divorce, bankruptcy or possibly both.
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