When it comes to bankruptcy, many times the act of filing is brought on because of family troubles. One of these family issues is divorce. Going through a divorce can be very expensive, and it can leave one of the, or both, spouses in dire financial straits. Conversely, going through bankruptcy can also cause divorce, as the stress of the situation strains a couple's marriage.
One common misunderstanding about divorce is that, when the couples split, they divide up debts that they have incurred -- in addition to assets, property and other financial matters. When these debts are divided, suddenly one of the spouses can be left dealing with creditors that they are not used to, nor are they even aware would be contacting them.
Bankruptcy can help divorcing couples before, during and after the split. Such a filing can protect your rights and help you recover from some of the crippling debt you incurred because of the divorce.
New York residents should consider the connection between divorce and bankruptcy in light of the situation facing actress Kelly Rutherford. Rutherford, who apparently made $486,000 a month while working on the show "Gossip Girl" before it ended last year, filed for bankruptcy recently because a nasty divorce and bitter custody battle drained her total assets down to about $23,500.
She owes roughly $2 million after a ruling in her divorce gave custody of her kids to her ex-husband, who lives in Monaco. She has to travel there to see her kids, and has spent a vast amount of money to contest the ruling.
Source: New York Daily News, "Kelly Rutherford files for bankruptcy after costly divorce, custody battle," Zayda Rivera, June 24, 2013