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Divorce Recession - Cold as Ice or Hot as Ever?

It seems like its everywhere…. reports that divorce rates are down. Is it the great divorce recession of 2009? Are spouses everywhere deciding that they’d rather stick out their lukewarm marriages rather than divide in half the what’s-left-half of what they used to have before the economy went down the tube? (And, did that even make sense?)

The Wall Street Journal today (July 13, 2009) heralds "What God Has Joined Together, Recession Makes Hard to Put Asunder". Reporter Jennifer Levitz cites to spouses having to live together in the same house while getting a divorce. One couple discussed how they work out mommy upstairs and daddy in the basement arrangements, including discussing their new dating woes, scheduling dates at different places so the spouses don’t run into each other, and deciding how to handle babysitting so both spouses can go out with their new paramours on the same night.

The LA Times posits today (July 13, 2009), "Divorce and hard times: Economic woes often cause marital splits, right? Well, not so fast." This recession is so bad that you can count divorce lawyers among those professions that have taken a hit, cites reporter Gregory Rodriguez. "Can’t stand your boring husband? Thinking of calling it quits? Well, you should have mustered the nerve to leave him well before this economic crisis. Now you might not be able to afford to live without him, literally."

Ond on July 4, 2009, Newsday wondered whether the Recession Adds To the Financial Burden of Divorce, pointing to a couple who wanted to divorce and split the $1.5 million in equity in their home until their house value plummeted, making the couple question whether divorce was the best option or whether they should stay in the marriage for the (lack of) money. Falling pension values also present a problem in providing property to divide in a divorce.

The Miami Herald questions "Is divorce rate a leading economic indicator?" Michael Gilden says,

The depths to which our country’s economy has sunk over the past year may have a correlation with this recent downward divorce trend. Many divorce lawyers had always maintained the opinion that divorce law is a recession-proof specialty. In good economic times, people tend to seek freedom from bad marriages so as to enjoy their wealth without the ties that bound them. In bad economic times, couples fought about having less money, which is also one of the leading causes of divorce.

The current economic climate, however, is like nothing anyone has seen in this country for generations. With the decline of the housing market, divorcing couples are no longer assured of a division of equity in what was most people’s most valuable asset, their home. Without the proceeds from the sale of a marital residence, many people did not know where they would acquire funds to purchase a new home for themselves. The situation only became worse as the stock market plummeted and peoples 401(k)’s became 201(k)’s and as securing loans and credit became nearly impossible. At some point, there essentially became an economic disincentive to seek a divorce.

So, is it really true that people get divorced when times are good and more people get divorced when times are bad? Or, are people waiting out the tidal wave of the recession in their lukewarm marriages, waiting for the first glimmer of hope in the economy to kick their spouse to the curb nad leave with half-of-what’s-left in the dawn following the storm?

As a board certified divorce specialist for 18 years and a Dallas Divorce Lawyer, I see the 2009 divorce trends as being abnormal, but not necessarily down from prior years. For example, usually Janaury is a big month for filing new divorces because folks usually make new year’s resolutions to "finally do something". This year, January was a lackluster month. But, for the first half of the year, my practice is only off by about 10% from last year.

I think some of the analysis of whether the economy is affecting divorce depends on the economic status of the couple. For high income/asset couples, the issues becomes one of prioritizing where they spend their less-than-before decreased discretionary spending. They might rather spend their income on a vacation, new car, or fine piece of jewelry. But, if they want it badly enough, they can shift those funds to accommodate a divorce.

On the other hand, folks who live close to their means, with little in the way of a rainy-day-fund, may not have the luxury to reprioritize their finances to add an additional residence for the spouses leaving the residence and two divorce lawyers to the budget. Those folks may be sitting still until the economy glimmers hope.

If you are the high earning spouse who can afford to take the house or stocks (or other devalued asset) and hang on to it until after the economy recovers. Where, for the housewife or lower earner spouse who might rely on the division of assets for survival post-divorce, this is definately not the time to get divorced.

It may hold true, as Gilden states, that you can just the beginnings of recovery by watching for divorce rates to go back up, when people finally say they’ve had enough of this economy to wait on getting a divorce.

For more on this discussion, see my post April 30, 2009: Is Divorce A Good Idea in This Recession?

See my other blog posts on the economy and divorce:

January 12, 2009: Increase in Child Support Modifications Seen in Dallas Divorce Courts

December 30, 2008: Divorce and Real Estate Market

Now is a good time for a Dallas Divorce

October 21, 2008: Financial Infidelity: Money and Marriage

October 8, 2008: Dallas Couples Shirking Divorce Amid Economic Woes

September 29, 2008: Bad Economy Makes Divorces Tougher