For many, the effect of the economic downturn became apparent one year ago as people saw their monthly expenses skyrocket due to the increases in the cost to put gas in the family car, to put food on the family table, and to pay the home utilities.  Most consumer goods increased in price, as distributors passed on their increased fuel and shipping costs.  In addition, for those lucky enough to have employer-provided health insurance, annual premiums also increased considerably - further shrinking net pay and adding considerably to one’s daily stress level.  As is not uncommon, families already experiencing financial difficulty may have been squeezed beyond their ability to survive, and home foreclosures are on the rise. 

I recently spoke with an attorney who felt she had done everything she was supposed to do - she saved her money and bought a house, put savings into the house with the goal of increasing the energy efficiency, she updated the bathroom, installed air conditioning, and installed new windows.  Over the years she has maintained the yard herself to save money, which meant that she dedicated a large portion of her weekend time to this chore since her daily commute had her returning home on weekdays at approximately 9:00 p.m. and there was no time until the weekend.  In addition, she often goes into the office on weekends to complete work for which she was unpaid, because the workload never seems to decrease.  She feared losing her job, and her health insurance, because she has a chronic health problem which requires costly care and medical supplies.  She is now facing the possibility of layoff, however, because her company is failing in this economy, and employment prospects in her area are dismal, at best.  If she falls behind on her mortgage payments, however, her financial circumstances render her ineligible for any assistance and thus she faces the possibility of losing her home as well.   If one can say that this person is fortunate, it would only be because her single status means that she is not at risk of having her marriage affected. 

Difficult economic times frequently result in increased divorce filings.  Yet, some geographic areas have seen divorce filings decline because people cannot afford to live separately, and/or the marital home cannot be sold.  This was recently reported in article on MSNBC.com.  If one were to believe the “experts,” we are in for a long run of difficulty, perhaps well into 2010, before the outlook improves.

If you feel that it is not feasible to remain in the marriage, there are alternatives you may wish to consider which may enable you to divorce for less than the hundreds of thousands of dollars, or even less than the tens of thousands of dollars which a contested divorce often costs.  If you and your spouse are motivated to proceed with divorce, then it would be wise to consider mediation or the collaborative law divorce process.  When couples mediate their divorce, they jointly retain a mediator who assists the parties to come to the table to try to resolve the issues in their divorce.  While parties may often feel empowered because they have considerably more involvement in crafting the result, not every case is appropriate for mediation (such as cases involving domestic abuse).  With mediation, It is recommended that each party retain an attorney to review the agreement for them and assist with revisions.  Even under these circumstances where each party retains an attorney and the parties jointly retain the mediator, the process can often be considerably less costly than a contested divorce action. 

Collaborative divorce requires parties to agree to retain counsel who have been trained in the collaborative process, and to further agree that neither party nor counsel will file anything with the court during the process.  In the event that the collaborative process breaks down, the parties are required to retain new counsel as their collborative counsel will not represent them in a contested action.  During the collaborative process, the parties and their counsel produce documentation and information voluntarily and all work together to seek a resolution which is beneficial for the family, as opposed to the contested divorce which is highly adversarial and often does not focus enough attention on the children.  If there are special issues, such as difficult financial issues, psychological or medical issues, or children or parties with special needs, the process permits other professionals to be brought in to assist, but these professionals often will charge only on an hourly rate for the time they are involved. 

Both mediation and collaborative law may result in a divorce process which is less traumatic, less costly, and allows the parties to feel more involved in the details of their divorce agreement and to craft a result that the family can hopefully live with for some time to come.  In this difficult economic climate, why not utilize a process that reduces the harm, financially and emotionally, on the family?  For more information on the collaborative law divorce process in Massachusetts, visit www.massclc.org. 

There is no easy solution for the downturn in real estate values and the fact that some couples may now owe more than their property could sell for in this market.  Some couples have agreed to divorce, but remain living in the home, as co-tenants, until such time as the market improves and the property can be sold without loss.  If one party wishes, or is willing, to remain in the home until the market improves, there may be an agreement to defer listing of the home if that party can carry the mortgage and monthly costs. 

As families face difficulties, the Courts will also become even more overwhelmed by difficult cases with no easy solutions. Tough economic times can sometimes result in tremendous creativity, and if cooperation is possible, the family as a whole may benefit.  If you are considering a divorce, also consider alternatives to contested divorce, such as mediation and collaborative divorce.