Bankruptcy often carries a stigma, with the unstated implication being that someone who files for bankruptcy protection has done so because of his or her profligate spending habits. This does happen, as people find their spending out of control due to overuse of credit cards. But more often, other problems trigger a bankruptcy. Medical problems, especially when if combined to a job loss, can quickly swamp most people’s finances. Another significant cause of bankruptcy is divorce.
And as with many things, a high income may only result in a more expensive divorce and bankruptcy. The actor Kelly Rutherford, who starred in “Gossip Girl,” has filed a Chapter 7 bankruptcy due to her divorce and custody dispute with her ex-husband Daniel Giersch. According to ABCNews.com, she owes $1.5 million in legal fees from the divorce.
She stated in an interview that, “I will never stop fighting for my children.” The price of that determination has left her with $2 million in debt and assets of only $23,937. While the scale is greater, at one point, she earned $40,538.42 a month, protracted litigation in a divorce or custody case can quickly drain your finances.
During a divorce, you need to be careful and keep an eye on the prize to avoid winning a pyrrhic victory. A divorce that spends your savings, your children’s educational funds and your retirement will hardly be a victory, no matter what the outcome.
If your divorce has left you in financial trouble, do not delay speaking with bankruptcy attorney, as they can advise you on how a bankruptcy can provide a financial fresh start to accompany your new life after your divorce.
Source: ABCNews.com, “Kelly Rutherford Bankrupt Amid Custody Battle,” Luchina Fisher, June 24, 2013