Getting Divorced During a Recession: Is Now A Good Time?

The country is facing a recession, and most of us are feeling the purse strings tighten. If you are in an unhappy marriage and have considered divorce, the question arises, is now a bad time to move forward? Creating two separate households can be costly, and the additional expense of attorneys can be daunting.

But, if divorce is inevitable, and timing is the consideration at hand, I suggest that when the market is low, this could be a good time to divide assets.  Here are some things to consider:

  1. Consider the Market: Do you want to stay in the primary residence? If the value has decreased and you would like to “purchase” your spouse’s share of the home, buying him or her out when the value is low saves you money. The same goes for marketable securities; dividing stock when the price is low can be favorable to the buyer. Business owners may pay a portion of the value to their soon to be ex, and a decline in value allows for a lower payment

  2. Affording an Attorney: Make no mistake about it, attorneys are expensive. However, attorneys rates increase year over year as well, so you will not save money on attorneys’ fees by waiting. If the attorneys are motivated to settle (this requires both spouses to be motivated to settle amicably), then the cost of counsel can be limited to negotiation and limited discovery (investigation of finances).  There are of course, less expensive routes including mediation, collaborative law negotiation and arbitration; but these are not for everyone.  Be sure to pick the best course that suits both you and your spouse.

  3. Handling Additional Stress: Will the emotional and physical stress (coupled with the financial stress of the recession) be too much for you? It is important to consider the additional stress you will most definitely endure while negotiating (or litigating) a divorce.  If this is a year you just went back to work and are juggling being a parent and employee or you have a sick relative that needs your time and/or care, you should consider the additional stress of divorce. But remember that it is one of several considerations. There is no “perfect time” to start the divorce process.