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Which comes first, divorce or bankruptcy?

Financial difficulties often bring about stress in a marriage, and this is why those considering divorce may also be looking into the option of bankruptcy. Dealing with financial stress at the same time as being in a toxic relationship can be an extremely stressful situation. While you can't change that right now, you can start to take positive action so that you can gain new control over the situation.

If you want to file for bankruptcy and divorce, you may be wondering which you should do first. You may even consider filing for both at the same time. The following are some things that you should consider before doing so.

Budgeting to avoid foreclosure

If your finances have suddenly become troubled due to an unexpected job loss or another financial restraint, it's important that your lifestyle changes reflect your lowered disposable income. If you have started to worry about whether you will be able to afford basic necessities such as your mortgage and grocery bills, you should sit down and prioritize your spending.

Spending prioritization may sound obvious, but the fact is that many people simply fail to take the time to establish a new budget when they start to struggle financially. As a result, their spending continues on autopilot, and their debt increases suddenly. In some unfortunate situations, this leads to families losing their homes to foreclosure. The following are some ways to budget so that you have a better chance of affording your mortgage repayments and avoiding foreclosure proceedings.

Why divorce is a big financial risk

If you earn less than your spouse and you're considering filing for divorce, making this decision is a scary one. You've become accustomed to living the lifestyle that you currently enjoy. While you want to give up your relationship, you don't want to part with your lifestyle.

It's true that divorce is one of the biggest financial risks that a person can take. In fact, the more assets you own as a couple, the more there is to lose. If you believe that your spouse may become vengeful when they learn that you intend to divorce them, it's important that you act swiftly to understand how the law applies to you and how you can develop a strong divorce strategy.

Negotiation is the key to stopping foreclosure

Foreclosure is not a good solution for anyone. The debtor will lose out because they will lose their home and any payments they have made toward the mortgage. The creditor also loses out because they have to put a lot of time into attempting to collect missed payments, and they'll also likely not receive all of the debt that they were owed by selling the home.

It's for this reason that the debtor often has the power to stop foreclosure in its tracks. A foreclosure only occurs as a last-resort - usually when the debtor has not cooperated with them. The following are some things that you can do to negotiate with your lender and successfully prevent foreclosure.

What are the advantages that come with divorce?

If you have found yourself in a situation where you feel that divorce is the only option, you may be wondering how you ended up in this situation. It's possible that you now have a negative attitude to life, and you may also be feeling pessimistic about the future. But it does not have to be this way.

The truth is that many positives can come from divorce. Some people look back on their life and realize that -- while it did not seem so at the time -- divorce was one of the best things that could have happened to them. If you are uncertain about whether you should take action to file for divorce, and if you're feeling worried about the future, the following is an overview of some of the positive things that can come out of a divorce.

What is foreclosure by power of sale?

If you have not been meeting your mortgage payment obligations for a significant period of time, you'll likely be facing foreclosure proceedings. Foreclosure is never a good situation to be in because it will lead you to lose your home, and you'll potentially lose any money that you invested in paying off the mortgage.

In Texas, there are two ways of going through foreclosure; foreclosure by judicial sale and foreclosure by power of sale. Foreclosure by power of sale is generally considered the more convenient option. Because this type of foreclosure involves the sale of the property by the mortgage holder without the supervision of the court, this is the simpler type of foreclosure.

Can loan modifications help me to avoid foreclosure?

If you are worried about being able to afford your loan repayments in the future, you should make sure that you address this issue as soon as possible. If you do not address the problem in a good time frame, you could find yourself in a position in which foreclosure is a real possibility.

When faced with the possibility of not being able to meet your loan repayments, you should start by contacting your lender to alert them of the situation. The sooner that you can do this, the more likely they are to be flexible. One of the options that they may present to you is the possibility of modifying your loan.

How a Texas divorce could affect your net worth

Those who decide to file for divorce tend not to be thinking from a financial perspective when doing so. In the majority of cases, a divorce is filed because at least one spouse believes that they will be happier when they are no longer in the marriage. While it's true that a newly divorced spouse is likely to become happier in the long term, it does not mean that they will be financially better off.

If you are considering filing for a divorce, it is, therefore, important that you take the time to understand how the process is likely to affect your net worth. Since assets need to be divided between spouses, it's possible that you will lose ownership of key assets such as the primary family home or your vacation home. The following is an overview of Texas property division laws that apply to divorcing spouses so that you can gain a better understanding.

Do I need to have a cohabitation agreement?

If you are living with your partner but you are not legally married, you may wonder about what your rights would be in the event that your relationship breaks down. If you do not officially own the property that you live in, but your partner does, for example, you may worry that you will have nowhere to live and no right to the home that you have together.

It is for reasons like these that cohabitation agreements are put into place. They help to give security to those who are living together but not married. Whether you should put one in place will depend on your individual circumstances.

How can bankruptcy help me avoid foreclosure?

If you have been unable to pay your mortgage obligations for some time, this means that you'll likely be facing foreclosure proceedings. Foreclosure means that your lender is taking action to cease possession of your home so that they can gain back at least some of the debts they are owed.

If you are worried about facing foreclosure, you may be wondering what the most effective ways to stop it are. Many people choose to file for bankruptcy when they are facing foreclosure. Doing so may be able to prevent you from losing your home.