Divorcing in a Down Economy

October 17, 2010

The tough job of dividing assets, splitting debts, deciding custody and awarding support in a divorce has gotten even tougher as the national economy continues to struggle. In what some financial experts predict is a long-lasting slump, more and more couples are seeking alternatives to the traditional, costly, time-consuming and contentious dissolution proceeding.

According to data provided by Divorce Financial Analysts -- a financial services company specializing in the effects of divorce on the parties' financial situation -- upwards of ten percent of litigated divorce cases cost a minimum of $15,000. That huge sum of money is something that many couples simply cannot afford in this era of layoffs, plummeting property values, and declining retirement or investment fund amounts.

State governments -- who fund the family courts that hear these cases -- have not escaped the economic crunch, and are filling court dockets in an attempt to get matters before the judges who will decide them. Some jurisdictions also offer do-it-yourself documents for couples who might not be able to afford the costs associated with a traditional proceeding.

Legal professionals are quick to advise caution when couples attempt a self-service divorce, however. Improperly drafted documents may not be enforceable or legally binding, and a future challenge to the terms of a settlement can be more costly and time-consuming than what the actual divorce would have been.

The Traditional Method

The word "divorce" itself often evokes fear-inducing thoughts of an expensive, lengthy and hotly contested legal battle. Most often divorces involve two parties, each represented by their own legal counsel, settling matters in a courtroom by arguing their case before a judge. Texas has modified that model slightly, allowing divorce cases to be heard by a jury if the parties so desire.

However, a combination of legal advances and external pressures has led to the creation of unconventional approaches to ending a marriage.

Alternative Methods of Dissolving a Marriage

The divorce rate has declined in recent years as some couples have chosen to stay married to avoid the added financial pressure of a divorce proceeding. Others have taken alternative routes to reach a divorce settlement to save time, money and stress.

Mediated Settlements

A mediated settlement is ideal for couples who are able to cooperate and work together to reach a settlement that distributes marital assets, divides debts, establishes custody of the children and sets the groundwork for the future. Mediation lets the parties decide how much input they want from attorneys and other experts. Couples who have an amicable relationship can often reach an agreement by themselves, only hiring an attorney at the end of the process to draft and file the appropriate documentation. Others meet separately with their individual attorneys and then -- still outside of a courtroom setting -- gather to iron out details that are later ratified by a family court judge.

Collaborative Divorce

In a collaborative divorce, the parties still primarily operate outside of the courtroom, but in a way that is more structured than a standard mediation. Collaborative divorce (and collaborative law in general) is a relatively new legal concept, rising to popularity within the last decade. It is heralded by many as the new benchmark of law, thought to encourage a spirit of cooperation and change the long-held view of the law as a contentious and adversarial process.

Collaborative divorce, a method encouraged by Texas law and many legal professionals, is more complex than mediation in that it typically involves:
- More than one meeting
- Each party being represented by his or her own lawyer
- The presence of mental-health professionals such as counselors or social workers (especially common if there are children involved, and required under the laws of some states)
- Asset and debt analysis performed by one or more financial professionals

This method is preferred by some couples because it takes some of the work out of their hands: they disclose the information to their attorney and the other experts, and then stand back as it is compiled. A recent Wall Street Journal article described the process as akin to tax preparation software; just plug in the data and receive a report. Of course, the parties still have input into the process and have the right to challenge any conclusion reached by the collaborative law team.

Even the simplest divorce has the potential to be wrought with emotion, stress and anxiety. For that reason, and many more, if you or a loved one is considering divorce, seek the advice of a skilled family law attorney in your area to learn more about your legal rights and courses of action you could take.

Article provided by WILSON BELLAMY BROWN & WILSON LLP
Visit us at www.wbbw-law.com