Does bankruptcy cause divorce?

Improved communication can break as well as strengthen relationships.  As Rachel Lynn Foley noted in her Bankruptcy Law Network post – Does Bankruptcy Cause Divorce? – it is not rare for couples to file for divorce after having gone through bankruptcy.  One cause is undoubtedly a continued failure to communicate about financial matters, perpetuating poor budgeting decisions.  Sometimes, however, improved communication reveals fundamental incompatibilities in the way husbands and wives handle money.  This can also lead to divorce.

While volunteering as a substance abuse counselor I have observed this phenomenon among recovering alcoholics.  As long as one member of the couple is chronically drunk or stoned, there is little cooperative decision-making, and both the substance abuser and the partner blame the substance for conflicts that do occur.  This state of affairs can persist for years. Sobriety removes that excuse, forcing people to communicate honestly about money, time management, emotional needs, and strategies for child rearing. Reconciling different approaches on all these fronts often seems overwhelming.

Debt has many characteristics of a drug.  Typically it begins as a voluntary commitment bringing clear-cut rewards, but unless the debtor is able to limit his usage, the debt escalates to the point where liabilities eclipse any positive effect. Debt allows people to avoid dealing with financial realities.

Bankruptcy is analogous to withdrawal. The person who emerges from a detoxification facility or a Chapter 7 bankruptcy, receiving at most a few general educational counseling sessions as a follow-up, is poorly-equipped to avoid relapse.  Ongoing regular support greatly improves the odds.  For people whose finances do not allow for professional counseling, there is a 12-step program, Debtor’s Anonymous, which has proven helpful to many people.  Information about how to get involved can be found on their website. Many social service agencies also provide budget counseling for low income people.

Recognizing that recovery from debt is a difficult and long-term process, and making full use of available resources, can save a marriage, or at least postpone the decision to divorce until the parties are better prepared financially and emotionally to make a fresh start on life.