It is indisputable that the decision to go through with a divorce proceeding is heavily influenced by the status of the economy.
Nowadays, it appears that many people contemplating a divorce do so in a very similar fashion to those determining whether or not to buy or sell stock. With rising inflation and fears of a looming economic recession, many couples might elect to delay divorce until the economy is a little more stable.
In essence, many people enter in and out of marriages viewing it as a mere business transaction and not as the lifelong commitment that it is truly intended to be. In these situations, divorce lawyers often become viewed by clients as financial advisers rather than as their attorneys.
This is not altogether a bad strategy. While it is never a good idea to stay in a broken relationship, it is critical to understand the full financial ramifications of divorce. The fact of the matter is that research shows both men and women suffer a significant drop in household income after splitting.
Whether it be a good or bad economy, there is no set standard for why or when people choose to get divorced, and surprisingly, there are advantages and disadvantages associated with pursuing a divorce during each of these times.
For instance, some people, especially those who are underemployed or who have taken pay cuts, may decide to go ahead with a divorce proceeding during a bad economy given that they can take advantage of being imputed at a lower salary in order to avoid significant exposure with regard to child support and alimony.
Others may also benefit by seeking a divorce during this time given deals that may be offered by struggling attorneys, such as free consultations and reduced hourly rates.
Moreover, some individuals strategically seek a divorce during a weak economy knowing that their spouse stands to gain a whole lot less, once their marital property is divided, than they would during better economic times.
One very poignant example is an individual who wanted a divorce due to the fact that his retirement account took a huge hit. Specifically, he figured that if he gets divorced now while the market is weak, he would be on the hook for a whole lot less money than his spouse would otherwise be entitled to upon division of their marital property, which includes his retirement account.
Strategically, he felt that getting divorced now would be the best way to leave her with as little as possible upon dissolution.
Conversely, a bad economy can also influence couples to remain married until it gets better, due to the costs associated with hiring an attorney and going through with the divorce proceeding.
In this same vein, people who choose to wait for the economy to improve before filing for divorce may also be doing so given that neither party alone can afford to separately take upon the expenses of the marital home post-dissolution. In other words, it is easier for them to stay married then to have to potentially face losing their home or other valuable assets.
Similarly, couples realize that if they get divorced during a weak economy, they may experience significant difficulty in selling the marital home for enough cash to pay off their mortgage and home-equity debt.
For example, one individual initiated divorce proceedings but decided to reconcile with his spouse due to the fact that the potential financial consequences heavily outweighed the benefits of getting divorced.
Divorce In A Good Economy
On the flipside, some prefer to file for divorce during a stronger economy, as the marital assets may be valued at a higher rate warranting a potential higher cash payout upon dissolution to the filing party.
For example, many individuals co-own a business with their spouse and wish to file during a better economy so that they can realize a profit upon division. Others may also file for divorce during this time given that they can actually afford to do so and can also take upon expenses post-dissolution that during a bad economy would be nearly impossible for them to manage.
Moreover, some divorcing couples who wish to sell the marital home as a result of the dissolution, may take advantage of a better economy knowing that they will likely be able to seek a higher asking price and benefit monetarily as a result.
Alternatives To Divorce
In light of the above, the question remains as to whether there are alternatives to seeking a divorce under some of the very difficult and challenging set of circumstances mentioned herein. The answer is definitely yes.
First and foremost, changing the way that we view marriage from the start may be the most powerful and effective way to help prevent the marital breakdown. Quite possibly, pre-marital educational programs, whether secular or non-secular, may help lay the foundation for couples by influencing them to view their impending union as an unbreakable and sacrosanct bond between a husband and wife.
In addition, for those already married and contemplating divorce due to financial struggles, for example, programs such as educational seminars and retreats may aid in restoring the troubled marriage by helping the couple learn more about debt reduction and money management. This is vitally important given that money is often a reason why couples argue and ultimately, end up in divorce court.
Also, promoting the creation of privately-funded public campaigns that both raise public awareness of marriage as a core cultural and sacrosanct institution and support private activities that foster maintaining healthy marriages/restoring troubled ones may also be helpful.
Altogether, the suggestions above, while not exhaustive, may provide some ways in which a married couple can seek to work out their differences before throwing in the towel and giving up on the marriage.
In other words, it may prevent couples from simply viewing the marriage from an economic standpoint.
Essentially, while divorces in many instances have become a discretionary purchase, the above demonstrates that it certainly does not have to be this way and that various alternatives abound.
One comment on “Is A Bad Economy A Good Time To Divorce?”
I just need to comment on this. I am seeking a divorce but certainly didn’t enter into my marriage with the idea that it was a financial union. On the contrary, when I got married I honestly believed it would be forever. My husband has made some very bad choices that have shown me that he never believed in the sacred nature of the bond of marriage. We have 6 children and they are the ones who discovered him in his indiscretions that have continued over 27 of the 28 years of our marriage. Sometimes you think you know someone, and then sadly in the end it comes down to the fact that you just really don’t. Financial questions are being asked of you, not because any single person ever thought their marriage was merely a financial union. Most people marry because they think they love each other. Marriage ends because of infidelity, and so many other reasons. For myself, I’ve worked hard to be able to support myself so my husband will not feel the horrible burden many men do after divorce. I want my children to retain the level of standard of living as much as possible. When a marriage ends, after years of marriage counseling, and trying so hard by one party to make it work when the other just won’t even try, it sadly comes down to the finances. You are lawyers, not marriage counselors so of course you will have to field all of the financial issues.
Thanks for you time.