Many people over the age of 50 seek out bankruptcy prior to or as a result of divorce. With the divorce rate of Americans over 50 doubling since 1990, it’s not a surprise that financial problems have also grown.
In a gray divorce, there are often questions about how to split retirement or assets and debts that have been accrued over time. It’s a major financial shock to go through a gray divorce, even when your finances are strong and solid.
Your wealth may drop when you divorce after 50
If you divorce after you turn 50, you should expect to lose around half of your wealth. You may also end up with significant debt, especially if you had shared debts that you were paying prior to your divorce. Divorcing does alter your finances significantly, and that’s why some people may turn to bankruptcy to resolve the issue.
How can bankruptcy help following a divorce?
Sometimes, going through your divorce first is the right option, so that you can see if you end up with debts that you may have shared with your spouse or that your spouse created in their own name while married. The financial devastation that a divorce can cause is hard to recover from at such a late age, but a bankruptcy could offer a helpful solution.
How? If you have been left with significant debts but don’t have much of an income, you may be able to go through a Chapter 7 bankruptcy to rid yourself of unsecured debts and reduce your overall expenditures. If you’re still trying to put money away for retirement, spending less time paying down debt you can’t afford will mean that you have more money to invest in stocks or a retirement account.
Additionally, bankruptcies are designed to help you keep many of your assets, so you may not lose much, or anything, that you obtained during the divorce. For better financial stability, bankruptcy could be the right option, particularly if you have many exemptions and a low income at the time. This is something to consider after a gray divorce so that you can start to get your finances back on track.