5 Tips for Couples Considering Divorce During an Economic Slump
Can You Afford to Get Divorced in this Economy?
With the home-mortgage crisis in the U.S. wreaking havoc in the real estate and banking industries, its affect is now trickling down into other areas, such as divorce. Under the current market conditions, breaking up is harder to do than ever.
Many divorcing couples are forced to live under the same roof because they can't afford to move on separately. They can't unload their houses for enough money to pay off their mortgages and home-equity debts, but job losses and tougher mortgage standards make it harder to afford splitting them, too. Much like The Great Depression of the 1930s, today's tumultuous economy is changing families in dramatic ways.
Divorce rates are actually dropping because it's too expensive to split up given legal fees and supporting two households.
A divorce could cost anywhere from the low-end of $50,000 to a high-end of $200,000 or more. These days, many people can't even afford to even maintain one home, let alone two homes with two mortgages or rents, utilities and all the other costs of maintaining a household. Some couples are so hard-hit by financial problems that they divorce, but stay in the same house and many others are trying harder to stay together.
In Los Angeles and Orange Counties, divorce rates have dropped and the number of Pro Per (cases filed personally without an attorney) have increased over the same period a year ago.
5 Suggestions for Couples Considering Divorce During Tough Economic Times
- Consider using the services of an experienced mediator to resolve the details of the divorce amicably and avoid the costs of litigation and legal fees;
- Consider delaying the sale of the family residence or living together in the same residence until the divorce is completed to save money;
- If possible, close or cancel all credit cards or home equity lines of credit, limit both spouse's access to credit to avoid increasing debt;
- Obtain a copy of your credit report. Inform creditors in writing that you are no longer responsible for a debt (and include your separation or divorce decree). Establish your own line of credit and get a credit card in your name preferably when you are still together, so that you don't get turned down when you are on your own;
- Speak to experienced real estate brokers and get a realistic valuation of the family home and look at other available housing options in your community.
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California Divorce Guide