Do money problems lead to divorce?
The answer to the question, “Do financial stressors increase pressure on couples to file for divorce?” – is Yes.
The affirmative response should not be all that surprising, financial strain on a marriage for extended periods, perhaps years, can become so disruptive that all harmony is lost. Every discussion can deteriorate quickly into a heated debate over ever-tightening resources. For some, it may seem as though the only thing holding the marriage together is the couples’ misapprehension that a divorce will cost them too much. But a marriage held together with “better the devil you know” is an unfortunate situation, for the spouses and for their children.
Divorce Rate Hovers at 50%.
According to Kenneth P. Altshuler, a Portland, Maine, family law attorney and the American Academy of Matrimonial Lawyers president-elect, the U.S. divorce rate has remained at 50% for five years now. This is despite the cost of divorce in a nagging recession. There was a brief six-month period in which the divorce rate dropped to 35-40%, but the statistical significance of that brief reduction was eliminated when the divorce rate increased to 60-65% over another six-month period.
Many unhappily married couples held on to the status quo as best they could, so fewer divorces were filed in one six-month period. After a while, though, remaining married in a divided household became too difficult and the divorce rate rose even higher for another six-month period. Since early 2010, we have seen a steady 50% divorce rate while our economy continues to sputter.
Presumably, those in a worsening or combative marital relationship would rather pay the cost of divorce and take their chances on their own in a bad economy. At some point, people just want to have a happier life, waiting for a better financial day may be like Waiting for Godot to arrive. Altshuler commented that “people have just accepted that the new normal is a bad financial situation.”
When the Marital Home is the Greatest Community Debt.
For many couples contemplating divorce, the marital home is not their greatest asset, it is their greatest community debt. What divorce in this economy has changed, according to Altshuler, is the property settlement agreement that the parties enter into. One provision that some spouses include, to make a financially difficult situation more manageable, is to turn the proverbial “lemons into lemon-aid” by riding out foreclosure in the home.
Because home foreclosures can take six months to a year-and-a-half to complete, the property settlement agreement may provide that one spouse remain in the home during the entire foreclosure process, however long that may be. This is without either spouse making payments on the mortgage.
The home mortgage is either already in foreclosure because the couple has defaulted on the promissory note, or will go into foreclosure because neither spouse can continue to make the payments. These spouses have no desire to make good on the mortgage or cure the default because neither of them can afford to carry the obligation alone after the divorce. Instead, the spouse remaining in the marital home, often with the children, stays until all legal interest in the real estate is terminated by legal foreclosure proceedings. That could translate to eighteen months or more of mortgage-free, rent-free living. This agreement allows the parties to focus their resources on child support and spousal support, and the children have the advantage of remaining in the school district a little longer.
Perhaps not the best solution to every couple’s financial problems, but a pragmatic one none-the-less. If divorce has put you in a financial situation where foreclosure is a serious concern, contact the Phoenix divorce attorneys at the Law Offices of Scott David Stewart to find out what legal options are available to you.