Saturday, March 7, 2009

What if we can't afford to Divorce?

Many have heard about the statistics that divorces are down nationally. Obviously, when people are stressed out, their jobs have been lost, and their finances are in shambles, it is not likely that they are suddenly happier in their marriages. The most likely explanation is that people believe that they cannot afford to divorce right now.

First, lawyers are expensive. Many people do not want to spend money on divorce attorneys in this economic downturn. People are having a hard time buying groceries and hanging on to their houses -- the last thing they want to do is to spend money on lawyers. However, the truth is that this may be the best time to seek the assistance of professionals - including attorneys.

Second, with the plunging values of homes, people are not able to sell their homes. In many situations the present indebtedness on the marital residence exceeds the value. Only by paying money to the title company at closing will they be able to sell their houses.

Third, the costs of maintaining two households has not dropped appreciably, and usually one spouse (despite the anger and frustration) is not willing to throw the other out on the street.

As a result, many spouses have decided to stay together, despite the realization that they really need a divorce. Here are some ideas to consider if you are in this situation:

1) You should consider going to a see a marriage counselor to make things better, or perhaps more importantly, save your marriage. At one point you likely vowed to stay married "in good times and in bad," and for "richer or poorer," exploring the causes of your unhappiness -- aside from the financial conditions -- might be an excellent idea. If kids are involved, it should be a priority.

2) Consider a post-nuptial agreement (or agreement between spouses) and divide assets and liabilities while things are still amicable. In most states, including Texas, spouses can agree to turn marital property into separate property while they are still married by way of a partition agreement. This way, when times are better, there are less ties between the spouses.

3) If one or both spouses have lost their jobs, and bills or credit card debts have been amassed, consider a bankruptcy. With reduced income levels, you may be able to qualify for more advantageous treatment under the Bankruptcy Code, or this simply may allow you to reorganize your finances to allow one of the spouses to hang on to the house. If your decision is to let the house go, by filing a bankruptcy, you may be able to discharge the deficiency. By discharging debt, the harassing creditor calls and stresses might be relieved.

4) If Bankruptcy is not an option, consider going to a financial planner. Some financial planners specialize in planning in the context of a divorce, others are more generalized. Consulting an expert is a great idea and nearly always worth the money. Sometimes the consultation, can at least crystallize the options so that there is less arguing about what to do.

5) Schedule a meeting to talk to a divorce attorney. Many attorneys allow you to meet with them for free. This is a good way to sort through your options. Many times the realization that this is for real can really help to light a fire under one or both of the spouses to solve the problems that are plaguing the marriage. Even if you decide against divorce, you may be able to spend the time wisely to choose a lawyer that you trust.