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Getting a Divorce During a Recession
The Effects of a Recession on Divorce
According to the Austin Institute for The Study of Family and Culture, infidelity is the most common reason for divorce. However, money issues and conflicts over finances come in a close second. In fact, 54% of couples who are in debt blame money for their disputes. They also believe that their partner's financial problems are reason enough to file for divorce.
But why does money have such a negative effect on marriages? Perhaps it's because it strongly influences every aspect of people's lives. Therefore, money issues tend to leak into activities, relationships, and personal desires. For instance, financial disputes between married parties can be about deciding whether to rent or own a home, lease or buy a car, move, send children to a public or private school, choose what extracurricular activities they should participate in, use credit cards, etc.
But even though financial concerns are a frequent source of conflict, an intriguing tendency shows that divorce rates tend to decline during moments of economic hardship. In such situations, people opt to remain married and continue living together.
How Recession Impacts Marriage and Divorce
According to experts, when couples have financial difficulties during a recession, they are more compelled to remain together because they believe they cannot afford to part ways. Regardless of how bad the marriage is, spouses conclude they don't have the means to live under two different roofs. For a couple, having two mortgage payments plus two sets of utility, HOA, insurance, and other obligations in times of financial insecurity seems like a bad decision.
On top of that, divorces are usually very expensive. The average cost is $10,000 for each partner's legal fees. There are also unforeseen costs involved, as well as expenses required to start living separately. Those can include moving out, acquiring new furniture, buying everything needed to set up a home, etc.
Spouses who are parents have even more to complain about, considering the extra driving required for custody transfers or other custodial responsibilities. These might appear to be modest costs. However, they can quickly mount up to increase the financial stress in an already tough situation.
Another issue to consider is that assets often lose value during a recession. As investment savings and retirement accounts decrease in value, so do house prices. Therefore, parties often have to acknowledge that their money or nest egg may not be as secure as they formerly thought. On the flip side, this might create an opportunity to buy out the spouse’s share in the family house rather than put it up for sale.
When a Divorce Is Inevitable
However, in many situations, there might be little choice but to move forward with the divorce despite the current economic climate. In the best-case scenario, people have enough resources to leave and get a divorce. On the other hand, some spouses might deem the freedom they will gain more significant than any financial loss. That is especially important when it comes to domestic abuse and cases where safety is compromised.
Parties might also consider taking up a second job or starting a side hustle. However, more work will impact parents' time with their kids, sometimes leading to even more stress.
How a Divorce During a Recession Impacts Children
Rough economic times affect children as well. For instance, newly divorced parents might not be able to afford private schools anymore, forcing the kids to attend public schools instead. Moreover, they might need to give up or limit their extracurricular activities. Vacations and trips might also become rare and far between.
Older children may need to find work after school or on the weekends to help with household expenses. They might even have to rethink college plans, switching from private or out-of-state colleges to local or public alternatives. Parents might also reconsider their commitments to assist in paying for their older children's education expenses.
A spouse paying child support or spousal support during a recession can argue to have the payments lowered. However, the receiving spouse can typically respond by adding a section in a separation agreement or court order requiring a review of the support payments after a certain period. Or they can ask for higher maintenance to cover the increased cost of living.
All in all, economic data reveals that single-parent homes typically have lower incomes and a higher rate of poverty. These patterns frequently hurt children's academic performance and increase the likelihood of coming into contact with the criminal justice system.
In Summary
The cost of divorce is high, considering attorney fees and legal expenses, among others. For this reason, spouses in need of money often postpone separation until the situation gets better economically. That decision is even more prominent among couples who work in unstable environments.
That said, those who do not wish to wait for the economy to stabilize to get a divorce may benefit from being able to start their new life sooner. But for those families who do stay together, difficult economic circumstances have been known to be the unifying factor that helped them find the strength to resolve issues.
In any case, divorce during a recession can be a challenging process and requires a different approach. However, partners can make the process as smooth as possible by being aware of a recession’s financial and other implications. Additionally, it's important to consider the recession's impact on children and ensure that they are taken care of throughout the process.
