There has been much ado about the effects of the economy on divorce.
Those who need to sell the marital home to fund their fresh start may now feel imprisoned in their marriage. With greater frequency, those unable to sell their home are forced to continue to cohabit with their spouse.
The Daily News featured a story about when a couple cannot afford to separate for which I was interviewed. Follow the link to read the article.
As the economy continues to falter, there are reports of a couple of distinct trends in family law cases: many couples are putting off their divorces and, if the couples are going forward with their divorces, they doing so without legal representation.
NBC News is reporting that “more distressed couples are putting off divorce because the cost of splitting up is prohibitive in a time of stagnant salaries, plummeting home values and rising unemployment.”
In more prosperous times, the marital home was the largest asset to be distributed. When it was sold, the proceeds used to be enough to allow both parties to have adequate funds to finance their fresh start. “But the disastrous real-estate market is leaving many homeowners owing more on their mortgages than their properties are worth — turning what would normally be their biggest marital asset into a liability.”
Today, with housing prices so low, it’s again cheaper for couples to “work out your differences now,” said Clinton J. David, a lawyer specializing in complex business transactions in Dallas.
Instead of you and your soon-to-be ex-spouse fighting over how to divide up the profits from the sale (of a home), you could actually, unfortunately, end up fighting over who’s going to pay off the lender because the loan on the home is actually more than the value.
For those people who do want to divorce, more people are representing themselves in court, according to the Associated Press. Many pro se litigants represent themselves in court so as to avoid the cost of attorneys.
But, there are inherent risks in representing yourself in court. Pro se litigants are unfamiliar with rules of procedure, the rules of evidence, and standards like the burden of proof. As a result, cases may not be properly presented in court, with devastating consequences, like the loss of custody of children.
I am awaiting reports of a third trend – reports of increased filings for modifications of existing child support and maintenance awards. It will be interesting to see how the courts will handle request to reduce support orders in view of the systemic meltdown of the economy, the loss of employment and the decline is stock portfolios and real estate values.
Time Magazine questions, Will the Economy Kill Your Marriage?
A couple of weeks ago, I noted that as the economy worsened, my practice became busier. Time seems to confirm my observations and even offers some possible explanations for this phenomenon:
There's the lawyer theory, that money provides the soft fatty tissue that insulates the marital skeleton; once it's cut back and people get a good look at the guts of their relationship, they want out. And there's the marriage-counselor theory, that couples who were never quite on the same page in the checkbook finally get pushed off the ledger by endless bickering over their dwindling resources. And the therapist theory, that financial worries cause stress, stress can cause depression, and depression is a total connubial buzz kill.
The article notes that the recession affects the upper and middle classes differently. For the wealthy, the recession offers an opportunity to end the marriage at bargain basement prices as property will be distributed at lower valuations. The article points to the case of Summer Redstone to illustrate this point:
Sumner Redstone filed for divorce on Oct. 17, when his more than 16 million Viacom shares were at $18.85, down from $39.40 six months ago; his CBS shares had dropped about $288 million in value in the same period. . . Mrs. Redstone divorces a poorer man than she would have six weeks ago.
For the majority of the population, the principal marital assets, the 401(k) and the marital home have lost much of their value. Without equity in the marital home and encumbered by substantial credit card debt, the parties are oft left to fight about who gets stuck paying the bills. In some cases, unable to distribute the debt or sell the marital home, the estranged spouses are forced to become unwilling room-mates.
To put the recession and divorce in perspective, I am reminded of the punch-line of a bad joke –where “Pat” complains that the recession is worse than divorce. Pat, continues, “I lost half my assets but I still have my spouse.”
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The potential windfall of same-sex marriage was underscored this week in a study by the Williams Institute at the University of California, Los Angeles, School of Law, which estimated that over three years, same-sex nuptials would contribute $684 million to the state’s wedding industry and $64 million to the state budget.
It’s basically a godsend,” said Daniel Doiron, the general manager of the Ingleside Inn in Palm Springs, which is offering honeymoon specials from $479 bargain basement (boutonnieres, 15-minute wedding, 20 guests) to the “Elizabeth Taylor” at $29,999 (poolside villas, wedding cake and reception, ice sculptures, flowers, sit-down dinner for 200 and three nights in the honeymoon suite).
The sharp downturn in the market is taking a similarly painful toll on couples who are breaking up. But now it's not that they can't afford their next home, but that they can't get rid of the old one. . .
"The housing market is having a major impact on divorce cases," said Stephen Ruben, a certified family law specialist in San Francisco. "If a house doesn't sell, it has a major impact on cash flow for child support, on where people live, on future taxes.
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