Money tears many marriages apart, but the economy is keeping many estranged couples together because they feel they can’t afford a divorce.
Forty percent of married people have delayed filing for divorce because of the economy, according to a recent National Marriage Project survey. They plan on going through with the divorce once the economy improves.
In a 2009 survey, the American Academy of Matrimonial Lawyers found that 57 percent of attorneys noted fewer divorce filings since the 2008 economic meltdown. “The current economic climate is proving to be far more unforgiving than estranged couples seeking a divorce,” Gary Nickelson, president of the AAML, said. “Forced to weigh damaged marriages against tight budgets and uncertain financial outlooks, many spouses seem more willing to try and wait out the recessionary storm.”
Donald Schiller, a senior partner at Chicago-based firm Schiller, DuCanto and Fleck, told Millionaire Corner that for his high net worth clients, there has not been a change in the divorce rate since the economic downturn. But the economy has delayed proceedings. “It may slow up the process,” he said. “It makes resolution of the case more difficult because of liquidity issues. If you are dealing with people who have a lot of real estate and the deals upon which they are dependent are slow, there isn’t as much cash to then create property divisions or buyouts.”
Nationwide, nearly one-fourth of mortgages are underwater due to declining home values. This has subverted the process of dividing assets, observed Chicago-based divorce attorney Marie Fahnert. “Instead of fighting over who gets the house,” she told Millionaire Corner, “the argument becomes who will tale on more debt.” In short, she said, the loser gets the house.
NBC recently reported, for example,that in Miami-Dade County in south Florida, there was an 18 percent drop-off in divorce filings from January to May of this year, compared to the same period last year. It may not be a coincidence that real estate prices in that area have fallen about 20 percent.
Many couples, Fahnert said, are considering alternative dispute resolution, including mediation or collaborative divorce, a less expensive process in which lawyers for each spouse work toward resolving conflicts. Others may opt for a more piecemeal approach in which spouses consult lawyers for only essential matters pertaining to the divorce. “It’s all about making things efficient and not spending money they don’t have on attorney fees,” she said.