For example, it used to be if you were getting a divorce everybody wanted the house. It had equity and you could receive an equity line to cash out. That made it somewhat easier. One spouse would keep the house and take some equity out and give it to the other and everyone would go on their merry way.
That has changed in our current economy and housing market. Now nobody wants the house. It is the ‘hot potato’ because it is not worth as much. You can’t sell it and you can’t borrow money. That has caused couples to delay divorce. Or in some situations that we are seeing more and more, they are staying together in the house even after divorce until something can be resolved with the house.
From a national perspective, there was a study on the impact of the recession on marriage that was conducted this year by the University of Virginia. It showed the recession clearly brought economic hardship to many American married adults aged 18-45. With 34 percent of survey respondents reported worrying often or almost all the time about being able to pay the bills. About 12 percent report either difficulty making mortgage payments or a home foreclosure. Another 29 percent indicate they have experienced unemployment or reduced pay or hours as a result of the economic downturn.
The study found that if you have at least three stressors – reduced income, house is in potential foreclosure, and high debt – it causes people to report less happiness in their marriage. When you start preparing for a divorce, we always advise people to try to get a handle on your debt.
But the UVA study shows that if you try to get control of your debt that seems to make the marriage happier and you might end up not getting a divorce. About 29 percent of married Americans – the same amount who agree that the recession brought financial stress to their marriage – agree that the recession has caused them to deepen their commitment to their marriage.
We are seeing that locally, too. The economy causes people great anxiety and a number of marriages can’t withstand it. Also, the study found that people with college degree were less likely to divorce than those without college degrees. So you can see the recession is pushing couples to divorce.
If divorce seems inevitable don’t rush in haphazardly. If you are getting a divorce, you need to plan and fully understand what your income is and what your expenses and debts. You need to start with good financial planning. It is a good idea to meet with a CPA to get a better understanding of your financial situation.
Lydia Sartain is a partner with the Gainesville, Ga.-based law firm Stewart Melvin & Frost. Her practice focuses on family law including divorce, child custody and mediation.