The decision to divorce is never easy. Addressing the division of assets and establishing support is difficult in good financial times. Unfortunately, the current economy has now made the decision to divorce and addressing finances even more challenging.
The real estate market has played a significant role in divorce. In most marriages the home is the biggest asset. When going thru a divorce the home usually has some equity that the parties often divide after the home is sold. However, the current real estate market has left many parties owing more on their mortgages than what their house is worth. In these cases, the asset has become a liability.
This has presented a change in divorce. Now, some parties agree to a buyout at a reduced value, others simply allow their foreclosure to go through and just walk away, and still a small number of others obtain a divorce and continue to live in the home until the real estate market bounces back. They do this so they can sell their home when it is worth more and have some money to start over. Still others chose to remain together and not divorce for the sake of finances.
More parties are turning to mediation. They chose mediation because it costs less. Spouses can share the costs, which are commonly $3,000 to $5,000 total vs. a retainer to just get started, which is about $5,000 to $10,000 each. In mediation the parties have more control because they control the pace on how quickly or slowly they make decisions and reach an agreement. There is less conflict so it is less stressful on the children. It is even easier on the divorcing parties. Mediated divorces result in better communication between the parties after the divorce, which helps them make important joint decisions with out anger and without incurring excessive fees from litigation.
The parties can still utilize the court system if mediation is unsuccessful and during mediation emotions are managed because both parties are in a forum that allows each of them to have a voice, to be heard and understood.
In these economic times, either alone or with mediators, divorcing parties are finding new and creative ways to divorce while still maintaining some financial stability.
Catherine F. Riordan is a partner at Veres & Riordan, LLC in Denville, NJ.