Divorce during recession, a double-edged sword

As if it’s not unpleasant enough to have problems in your marriage, today many couples are feeling trapped as the economy very slowly recovers.

The decision to divorce may have to be a “NO” for you, at least for the time being, if financial stability has taken a front seat. For men especially, money tends to be at the root of many decisions and the question of divorce is no different. Couples are staying together, living under the same roof, because their family income has been cut in half or in some cases eliminated altogether. It takes special people at the most difficult time in your lives to continue to co-exist under these circumstances.

With housing prices slow to recover, a couples’ equity in their home has often significantly decreased. Often, families are forced to stay together in the same home even after the divorce decision has been made; waiting months, sometimes more than a year, for their house to sell. What kind of environment are we subjecting our children and family to, continuing to live with a partner that we no longer want to be with, solely for the money?

Properties, including investment and retirement portfolios have decreased, in some cases more than 30%. Should you stay together hoping to upgrade the pie that you will split? Is that realistic? Does anyone know how long that will take or when that will actually be?

Now if we place emotional security above financial stability, the decision to proceed with divorce is often a resounding “YES”. Women tend to make decisions of the heart and are the ones more often taking jobs or even second jobs they perhaps otherwise would not have, and dads are sometimes staying home with the kids.

If one of you does move out, there may still be mortgage payments, and now there may be rent for the partner who has left. If you can’t sell the house, then one of you retaining it at a lesser valuation may, over time and as prices rise, be a smart financial decision; will keeping the house instead of other assets, in the long run have been the better financial decision?

If portfolios are divided during a recession, then one partner may end up with the share of the pie that rebounds more slowly; if you are the fortunate one, much more quickly. Are you willing to take the financial risk for your emotional health?

Money matters during a recession are often the overriding theme in a marriage. During turbulent times in a relationship, the decision to end a marriage is a double-edged sword. Will we sacrifice our emotional well being if we stay? But then again, can we afford not to?

Sharon Numerow is a Certified Divorce Financial Analyst™ and the founder and owner of Alberta Divorce Finances. She is also the proprietor of a personal income tax return preparation business. Sharon has a deep and personal understanding of the financial implications of divorce. She has worked with clients and lawyers for more than 10 years. She can be reached at (403) 703-7176. View her firm’s Divorce Magazine profile.