Options After Divorce For Couples Who Divorced With Debts

health-care costsThis post is Part Two in a two-part series by Brooke McDonald on how a divorcing couple, and a couple who has divorced but still has debt problems, can benefit from a bankruptcy.  Part one examined consideration of getting a bankruptcy before the divorce. This post examines consideration of mutual bankruptcies after the divorce.

In my last post, I examined how a pre-divorce bankruptcy can benefit couples in debt – but what about couples who have already divorced?


A story will serve our purposes and better illustrate the problem – and possible solution – at hand.

Cindy and John have been married for four years. They are planning to get a divorce. During their marriage, the couple did not pay off several large purchases made with credit cards, and Cindy incurred student loan debt while earning her MBA. During the pre-divorce negotiations, the couple works with a mediator to divide their assets. Through the Marital Settlement Agreement, the majority of the credit card debt is decided to be John’s responsibility and the remaining credit card debt and student loan debt is Cindy’s.

Soon after their divorce, Cindy begins to pay back her grad school debt. She is adjusting to living on her single salary and finds it challenging to pay back the debt. John stumbles into hard times after his divorce. He takes a pay cut at work and encounters some health difficulties. These factors make paying back his debt nearly impossible, so he gets behind on his payments.

John’s bank, waiting for payments it never receives, then pursues Cindy and sues her for the debt. Continue reading

Bankruptcy Pre-Divorce Can Benefit Couples In Debt

debt-definition-300x199 This post is part one in a two-part series by Brooke McDonald on how even a divorcing couple, or a couple who has divorced, may find bankruptcy a helpful tool in setting up fresh, new lives.

Divorce is never easy. The process of untangling two lives requires slicing through and divvying up all shared assets. Divorce negotiations can be exhausting, emotion-filled times. Adding stressful financial matters to the mix can further complicate the process. Divorce during times of financial success is concerned with dividing assets. But during hard economic periods, it may be more common to be assigning debts or assets with negative equity, such as property. If a couple has unpaid debt, this often raises the stress level of pre-divorce negotiations. Conflict over unpaid debts preceding divorce negotiation can lend an impending atmosphere of instability, fear, and suspicion to the divorce negotiation environment. Continue reading

Divorce Impact on Adult Children – Part Four

This concludes a series by guest writer Mary Murphy, LICSW. Mary is researching the impact of divorce on adult children — and it seems there is an impact, and possibly a negative impact, even when the children are no longer “children”. Being a legal adult does not mean the divorce of your parents has no impact. Part Four of Mary’s post follows, as well as an opportunity to participate in her research.

 A New Family: Late life parental Divorce and its Impact on Adult Children

A previous article in this series discussed painful assumptions that are often woven into the language of divorce and adult children.  Parents who divorce after decades of marriage may assume their adult children will come out of the family break up unscathed. After all:  They should understand; they are adults, too. The term adult child is itself paradoxical. Continue reading