The Awful Avalanche: Divorce and Bankruptcy

I’ve been listening to one of the highest paid divorce attorneys in New York, as he makes the podcasting rounds. He said something recently that made me nod my head:

“Divorce is like Bankruptcy: you go bankrupt slowly, then all at once.”

The saying reminded me  of the very beginning of an avalanche. Tiny at first, even as small as a pebble, but then at the end, the avalanche is barreling down the mountain.

The Slow Decline.

In both financial and marriage, the problems seem small enough and the warning signs quiet enough that they’re ignored: not only by the couple themselves, but also by those around them. Financial issues are often things that don’t necessarily mean you’ll go bankrupt – like growing debt, missed payments, and reliance on credit cards. Marriage is similar. Small issues like challenges in communication, emotional distance and small resentments are common in every marriage.

But it’s the next step that differentiates a healthy relationship (financial or marital ) from those headed for breakdown.

2. Denial and Avoidance.

As people founder financially, they keep spending, hoping that something outside themselves will come to save them. They don’t take ownership of their behavior and don’t see themselves as the person who needs to change their behavior to fix the problem. In marriage it’s the same. Each person doesn’t change, but rather hopes the other will change, and sweeps the conflict under the rug.

3. Temporary Fixes instead of Deep, Real Solutions

The avalanche of financial bankruptcy is preceded by furiously trying to take out more loans to cover outstripping expenses, using balance transfers or stealing from the 401K or retirement funds. Most people feel that it’s better to deal with the problem this minute and pay the outrages tax and penatlies than go bankrupt. Unfortunately, because their choices and behavior hasn’t changed, they’ll likely still choose bankruptcy.

In marriage, and I saw this most often, people are putting a bandaid on a devastating wound, hopeing that the minimum effort toward therpy will magically save their marriage. Again, they look outside themselves for someone or something to save them, but they’re not convinced that therapy does any good, and so they aren’t committed to it in any real sense.

Then It all comes crashing down.

The Breaking Point: All at Once.

Financially, the risky debt choices come due: a person loses their job, they’re now in a lawsuit, or a creditor comes after them. In Marriage, there’s the Big One – the discovery of infidelity; or the  the fight where things are irreparably damaged, and the people don’t have the practice or skills to repair it. Or one spouse comes to the realization that it just isn’t going to get better going this way.

Irreversible Consequences:

Both Bankrupsy and Divorce end in damage that the person can’t foresee. Most people regret declaring bankruptsy or getting divorced, but they really didn’t see any other option. This isn’t to say there weren’t other options – but at the point where the person or couple realized they were in danger, the bit of snow had snowballed into a slide and the avalanche descended.

What to do?

Marriage and finances need daily tending. I suspect about 50 percent of the people I talk to think they can just take a cursory look at their finances or be kind to their spouse here and there. Healthy habits of any kind take determination and consistency, as well as sacrifice. Financial and marital health is hard work.

Tending your finances means looking at your bank account and budgeting app or software frequently – I encourage nearly everyone to look at the budget every day, at least in the beginning. Tending to your marriage means practicing respect and affection each day.

Recognize and admit warning signs.

This takes attention and knowledge – reading books and podcasts that help you identify what a healthy financial life or married life is of utmost importance because you’ll know when things are wrong.

Be Proactive.

Cultivate trusted mentors and advisors to speak into your financial or married life.

Seek help early – find financial coaches and advisors, and therapists for emotional problems.

And Trust that Recovery is possibly.

Both financial and marriage issues can be brought back from the brink – as long as change is something you’re willing to do.

Whether its money or marriage, destruction happens slowly, suffering over time – until it crashes all at once. Avoiding disaster is to know what is healthy and embrace that change before things spiral out of control.

What small warning signs in your finances or relationship needs attention today? Don’t push the discomfort away. If you need help, set up a consultation today.