There’s no doubt that the decision to get a divorce may be one of the most difficult, and complex, of any lifetime. But during a recession, financial worries, sinking stocks and an uncertain job market can make matters worse. With slumping housing prices complicating potential home sales and many spouses out of work, can divorcing couples even afford to move forward and create the separate households and lives needed to find peace?
“In my experience, ordinarily when a family goes through economic difficulties, it creates tension. During a recession, the rate of divorce goes up, but this recession has hit so hard and it has lasted so long, people literally cannot afford to separate and live separate lives,” says Bill Thompson, chair of Archer & Greiner’s Family Law department in Haddonfield. “People will come in and discuss the consequences of divorce, and when they realize they will have to carry the cost of two separate homes, they sometimes defer even beginning the process.”
Joseph M. Weinberg, of Weinberg Kaplan & Smith in Haddonfield, says the last five years have seen dramatic change in the divorce and matrimonial litigation field.
“Prior to 2008, the parties argued over how to divide assets. Today, as often as not, the dispute is about dividing debts,” he says. Before the recession, the spouse with primary custody of the children often received the home, but today, many couples can’t even afford to keep it and have to decide whether to sell the house in a short sale, or walk away from it entirely.
“The perception often appears to be that there is no assurance that finances will improve,” says Weinberg. The demanding and challenging task today is for attorneys, accountants and other family law professionals to be “creative and innovative in their thinking in order to … reach a fair and just result during trying times.”
The ramifications of a divorce are certainly far reaching, with both emotional and financial consequences. The heaviest financial troubles can start when one—or both—spouses have had a reduction in income, says Amy Goldstein, from Capehart Scatchard in Mount Laurel.
“It’s very stressful, especially where there’s a dependent spouse who’s going to rely on alimony,” Goldstein says. “If the person who will pay alimony has a job that’s in question or has to face a reduction in income, the pressures can add up quickly for both people involved. Maybe in the ‘80s or ‘90s you felt that you could rely on the other spouses’ income, but you can’t necessarily rely on that anymore. … So everybody in that situation is on very shaky ground.”
As a result, consumers are becoming more responsible and conscious of spending, both with consumer debt and legal habits.
“People don’t realize how much control they have over the cost of divorce—I think clients are more cautious now about their legal fees, so they won’t do things that will cause the fees to increase,” Goldstein says. That includes picking which battles are important and forgoing the smaller issues, which lessens the conflict level and burden on everyone.
“In the past, we would get a lot of phone calls about pick-up and drop-off times, smaller issues like haircuts or piercing their children’s ears—small things that really, if you took a step back, you’d see you don’t need a lawyer to resolve.” Limiting the amount of fighting can have a big effect not just on the cost of the divorce, but also on the emotional fallout as well, says Goldstein. And that’s better for everyone involved.
Now, for families who have to contend with splitting up and selling a house, the floundering market has made action difficult. Sometimes the amount of debt exceeds the value of the house, so homeowners are stuck when it comes time to sell. Many have had to consider short sales, loan modifications or stretching out their mortgage, or even bankruptcy.
“One of the main issues we see across the board is people have a whole lot less equity in their home. That almost has a snowball effect on how divorce can be handled because you don’t have the [flexibility] that people thought they had or had planned on having,” says Ronald G. Lieberman, of Adinolfi & Lieberman. “That’s certainly not something we were seeing five to eight years ago.”
As an attorney, Lieberman, who (along with partner Robert J. Adinolfi) is certified by the N.J. Supreme Court in Matrimonial Law, says he doesn’t make any financial planning decisions for clients, but helps put them in touch with a financial planner, an accountant or other specialists to help. The snowball effect can affect more than just real estate, he says: Retirement savings and college planning can all suffer when an event like divorce puts people financially off track.
It’s a very complex issue, Lieberman says, for couples trying to decide how they will move, how they will take care of the kids, and whether they will be able to live a lifestyle similar to how they lived when they were married. “The fears are magnified because of the economy.”
The main change many divorce attorneys are seeing is people living in the house together while going through the divorce—because they can’t sell it and can’t afford to have two separate residences—which makes the situation very emotionally challenging.
In those cases, it’s difficult for couples to separate themselves or get any distance from the problems, which can lead to more fighting. When living in the same house together, “it’s hard to think clearly and effectively when you’re on top of each other all the time,” concurs Goldstein. “I do encourage people not to get into arguments and to walk away from them when they start, and certainly to try to be very civil, especially when there are children living at home.”
“I think the most important thing I do is in the first meeting with the client,” Goldstein says, which involves “talking through this particular reality” that they may be forced to remain under one roof throughout the divorce. “We talk about it so they’re aware in advance of what challenges they’re going to face; knowing ahead of time helps people cope with it.”
There are ways to avoid a potentially contentious state of affairs, however. New measures, like mediation services or alternative no-court divorces, have gained prevalence in the past four or five years.
“Any time you’re looking to save money, I recommend alternative dispute resolution,” says Howard Mendelson, of Davis & Mendelson, LLC in Voorhees. He explains that many of today’s couples are turning to new methods to address the split and save money.
“People can’t [always] afford to hire two lawyers and fight with each other. I find that to be the case. Now they meet with one lawyer—me. I serve as the mediator in that case and they solve issues together.” Mendelson says he still encourages his clients to seek independent counsel, but many times they opt not to.
Mediation has risen in popularity in recent years, as well as arbitration, where troubled couples meet with a lawyer and pay him to act as a judge. “Essentially, they’ll present the case to me and seek counsel, and ask me to decide what’s best,” Mendelson says. Collaborative divorce, another alternative that’s rising in popularity, involves two lawyers who agree to work together, along with the help of accountants, marriage counselors and other professionals, to reach a resolution instead of adjudication.
The benefit of these various methods are easy to see: It’s cheaper and faster than going to a judge and through the courts. “Trial can be very, very, very expensive, but emotional tolls are expensive, too,” adds Lieberman. “People realize they need to move on, but don’t want to bankrupt themselves to do it, nor should they.”
Chris Musulin, of Musulin Law Firm, says despite the times, most people can meet the expense of a divorce, but choosing the right lawyer and method is key.
“If you are an intelligent legal consumer and pick the correct attorney, divorce can be affordable,” Musulin says, recommending much deliberation before moving forward, deciding whether the attorney has ample qualifications and knowledge to properly educate and guide clients through the process.
“Ask yourself these questions when choosing an attorney: Does the attorney have the reputation or exhibit the personality of a problem solver? [Decide whether] he or she [will] make you an equal partner in the process and empower you to participate in the significant decisions of the case,” he asks. “And, at the same time, does this attorney insist on having you realistically assess the situation?”
At Charny, Charny & Karpousis in Mount Laurel, a team of seven women attorneys share more than 60 years of experience in areas that include divorce, custody, domestic violence and other personal matters.
“In this economy, selecting an experienced and efficient divorce lawyer is more important than ever. Divorce clients need someone who is practical and able to smoothly navigate the legal system,” says Judith S. Charny.
It’s important to remember the right attorney never loses sight of his or her client’s best interests, she says, especially when handling a legal matter that is so personal—whether that means recommending mediation, an alternative method, or heading to the courtroom.
No matter the circumstances, it is never good to stay in a bad marriage. In uncertain economic times, however, the question of being able to weather the storm becomes a little more complex to answer.
…Special Advertising Section from the pages of South Jersey Magazine…
Legal Matters
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When you need a family law attorney, hire the firm with strong, proactive and cost-effective representation.
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Musulin Law Firm, LLC
Mount Holly | (609) 267-0070
BurlingtonCountyDivorce.com
Theiler & Mourtos, LLC
If you want to modify spousal/child support, custody or parenting time in New Jersey, you must demonstrate that there has been a significant change in circumstances warranting the modification.
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Transitions Mediation Center
William H. Donahue, attorney, mediator and owner, provides legal and mediation services in divorce. Donahue specializes in high-conflict couples and those with highly emotional parenting issues.
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Weinberg, Kaplan & Smith, PA
More than 60 years of combined experience and dedication to clients in the family court. With concentration in divorce, child custody, support and related matters, their firm stands ready to assist you, whether the issue is setting a basic child support amount or a complex divorce. Members of their firm are also experienced in domestic violence, civil union litigation, adoptions, and criminal and municipal court matters.
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Published (and copyrighted) in South Jersey Magazine, Volume 9, Issue 1 (April, 2012).
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