Debthelper: Bankruptcy and Divorce

     Divorce is stressful emotionally and financially draining on your wallet. I have seen situations where bankruptcy and divorce go hand and hand. Financial problems do contribute to the end of many marriages, and divorce itself can have financial implications. The loss of one spouse’s income or lack of sufficient child support or alimony payments can make your new life hard. Sometimes obtaining a fresh start by filing bankruptcy can help you make the transition to your new life much smoother. Filing bankruptcy is harder than it used to be, but it can still be done.  

I have heard comments from people saying that you couldn’t file bankruptcy anymore. That, of course, is false, but filing is a bit harder. To file bankruptcy, first you must go through a pre-bankruptcy counseling session with a certified credit counselor, as well as a post-discharge education class. The sessions cost $50 each can be done either on the phone or in person. 

In my experience, people come into the session a little nervous because they don’t know what to expect. You need to realize a good credit counselor is not going to judge you. We understand that life happens, and our job is to educate you on how to avoid getting into the same situation in the future; not to judge or scold.  

So what does a pre-bankruptcy counseling session consist of? First we will ask you to fill out some forms to verify your identity, because bankruptcy counseling can be done over the phone or in person. We will have you fill out information on your monthly living expenses and income. Although we are not allowed to provide legal advice, we will also give you some basic information about the Bankruptcy process. Our job is to determine if filing bankruptcy is really your best option.  

Honestly, I have done many pre-bankruptcy counseling sessions and I have seen only two people that might have been able to qualify for a debt management plan.  Most people that have decided to file bankruptcy have no other options, and we know that.   

Once you have discharged your case, and have your case number, you can sign up for the post-bankruptcy education class. The goal of the education class is to educate you on how to avoid getting in the same situation in the future. The class focuses on tips on how to save money every month (even if it is only a little), how little daily expenditures can add up and how to use credit responsibly. We actually encourage you to rebuild your credit, but just to make sure that you have the money in your checking account to pay the bill off once it comes in.  

There is no reason to be nervous about the credit counseling portion of your bankruptcy case. There are many compassionate and understanding counselors at your local non-profit credit counseling agency. If you are in need of pre-bankruptcy/post bankruptcy counseling, please feel free to contact me.  



Jennifer Lane is a certified credit counselor and is taking questions I can answer in upcoming articles. Please feel free to e-mail your questions to me at jlane@debthelper.com.