People often ask me a version of the following question: “Where do your clients come from? I don’t know anyone who has filed bankruptcy.” My response is normally something along the lines of “Well, do you know anyone who has gone through a divorce?” The response is always “Oh yes, I know lots of people who have gone through divorce.” “Well, then,” I say, “you know a lot of people who have filed bankruptcy, because statistics show that half of all people who go through a divorce end up filing bankruptcy within 2 years.”
Wow, that’s a lot of people when you stop to think about it. I just dug up some divorce statistics off the internet. The best guess of researchers for the “actual” divorce rate in the US in 2018 is 42% to 45%. It’s tough to get an exact number because there are multiple ways to calculate that statistic. But here are some other eye-popping divorce statistics: 41% of all first marriages end in divorce; 60% of second marriages end in divorce and 73% of third marriages end in divorce. There is a divorce case filed every 13 seconds in the United States. 50% of people will see their parents divorced in their lifetime. So, in short, a lot of people go through divorce, and half of those people will be forced into bankruptcy.
So, if you are currently going through a divorce and also facing financial difficulties, I suppose you can take some solace in knowing that you are not alone. I realize that doesn’t help much, but at least it tells you that your financial struggles are probably more about your current situation than they are about your ability to manage them. It’s tough enough to handle your finances when you have 2 people working to support one household. When those 2 people now have to support 2 households, well, most times, the numbers just don’t add up. Also, take into account that factors that can lead to divorce sometimes interrupt the household’s cash flow: job loss, depression, illness, substance abuse. So it’s no wonder why divorce so often leads to bankruptcy. If you find yourself going through a divorce and having significant financial issues as well, you may want to at least schedule an initial consultation with a bankruptcy attorney to discuss your specific situation. Most bankruptcy attorneys offer a free initial consultation (my office certainly does), and you probably need to discuss the issues that are common to both the divorce and a possible bankruptcy, such as how to handle joint credit card debt, mortgage loans and car loans.
By Jeff Wagoner, W M Law President