• 17
  • October
    2011

As many of our Nashville readers may be aware, the two traumatic experiences of bankruptcy and divorce often seem to go together. Tennessee, with a divorce rate around 67 percent, is ranked third in the nation in the divorce department. Tennessee also has the second highest personal bankruptcy rate in the nation. According to many experts, the correlation is beyond doubt.

Bankruptcy and divorce was the topic addressed by divorce financial expert Rosemary Frank at the recent annual Family Law Institute in Nashville. According to sources, Frank's comments dealt with divorce-induced bankruptcy and possible ways to prevent it.

As Frank pointed out, divorce can not only complicates or accompanies a bankruptcy in many cases, but directly causes it in as many as 20 percent of cases for individuals who otherwise had sound finances.

In terms of post-divorce bankruptcies, Frank said that making a financial analysis of any settlements proposed during the negotiation process is critical, since it allows the parties to see the long-term consequences of any settlement. With the ability to see that, the parties are then able to do more informed negotiation and to make any necessary changes in lifestyle to make the settlement work for the future.

Doing a financial analysis of a proposed settlement can often be difficult because of the fact that some assets appear to have equal values right now, but will not in the future. To the extent this takes place, equitable division of property is more difficult. There is also the issue of the financial ramifications of future taxes, which cannot always be predicted accurately. These and other matters add complexity to the already complicated area of divorce.

One of interesting comments Frank made in her address to the Tennessee Bar Association is that "Divorce is an enduring financial condition. Not a transaction." Those who have been through the process are aware, perhaps painfully so, of that.

Source: PR WEB, "Frank Addresses Nashville Bar on Bankruptcy and Divorce," October 11, 2011.