April 2, 2010 by wendy.

After the Divorce – What Happens if You Can’t Agree? 

Just getting through a divorce is often quite a struggle – trying to agree on dividing assets, how children will be parented in two separate households, and coming to terms emotionally with issues from the former marriage.  It is only natural that formerly married people will have disagreements after the divorce.  Perhaps their settlement agreement is not entirely clear and both parties are interpreting it differently.  Possibly one party does not agree with the terms of their settlement and chooses not to comply.  The children may have different needs or changes in their lives.  More often, in these difficult economic times, the financial situation of one or both parties may have changed – and probably for the worse.  For example, what if the house doesn’t sell?  What if one party is laid off from work for an extended period or becomes seriously ill and cannot make their payments?  How can the settlement agreement be changed? 

Parties can change the terms of one or both of their financial agreement and the parenting plan if they both agree to the changes.  If they have difficulties in agreeing, they can certainly go to mediation to obtain the assistance of a neutral third-party.  Not only is a mediator skilled in helping parties to resolve their differences, but this type of professional can often can formally write the changes the parties wish to make.  Alternatively, the parties can request an attorney draft the changes they wish to make to their settlement agreements.

If mediation does not work, the parties can always contact attorneys for assistance.  Attorneys will be able to tell their client if he (the client) has a reasonable case if they need to go to court.  The attorney can also work with the other party’s attorney to try to resolve their differences between the couple.  If all else fails, the parties can go to court and present their case to the judge.  This can be expensive, time consuming, and stressful.  Moreover, there is no guaranteed win – for either party.  An added risk is the serious damage that can be done to what may already be a poor relationship with the ex-spouse.  In extremely difficult situations, however, utilizing an attorney may be absolutely necessary to making changes affecting large amounts of money or serious parenting issues.

My experience is that if parties can agree to changes, they are likely to save money, preserve a working relationship with the other party, and potentially obtain the agreement that works for both of them.  This is true whether consensus is obtained by discussions with each other or by using a mediator.  After the divorce, things may not necessarily set in stone.  It is possible to change things, but it is certainly easier if parties can negotiate and agree to the changes.

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October 12, 2009 by wendy.

The recession has changed the face of divorce.  Divorcing couples have a lot less money to spend, and the dividing the assets and debt has become even more important than ever.  Couples are often angry and emotional when going through divorce, and all too frequently, one or both parties’ initial reaction is to “get an attorney and go to court.”  In some cases, hiring an attorney is necessary and the smart thing to do.  There are some pitfalls, however.  Attorneys often help clients settle out of court, but the cost is high – both emotionally and financially.  And using attorneys to settle a case is often a matter of positional bargaining – one wherein more “stuff” for one person means less for the other party.  Litigation is even more expensive and emotionally draining. 

One way to potentially save money on divorce is through mediation – if both parties truly want to try to settle.  Mediation is usually “interest-based,” in that the mediator helps the parties to satisfy their interests and concerns in the divorce, rather than just dividing the pie.  So – not only can mediation be a more-cost effective solution, the outcome can be creative and include any number of issues that are important to the divorcing couple, but not necessarily to an attorney.  Moreover, the parties are more likely to adhere to the settlement if they have a role in creating their settlement.

These days, any settlement agreement (called a Memorandum of Understanding by many mediators) should be very thorough.  The rocky economic times in which we live dictates that a good agreement should contain any number of “what-if?” clauses.  What if the house doesn’t sell?  What if one of us loses our job?  What if one of us gets sick and can’t make the payments as agreed?  What if the spouse getting the house cannot refinance?  These and other questions that are germane to each couple’s situation should be included in a settlement agreement these days. 

In mediation circles, there is an expression, “If you litigate, you lose.”  Although a dramatic expression, there is some truth to this.  With mediation, couples maintain control of the process, expenses, and potentially, the outcome.  With litigation, couples put much of their control in the hands of attorneys, the expenses can increase dramatically, and the outcome is often a crapshoot in the courts.  Even if the couple does not go to court, and the attorneys are very involved in settling the divorce – and all too often their focus is strictly on dividing the marital assets.  They may or may help to resolve other, often personal, interests that are important to one or both of the parties.  Additionally, attorneys may or may not be aware of the taxes and the long-term impacts of the settlement on one or both parties. 

Be aware that just because you may be going to mediation for your divorce, you can still consult an attorney.  An attorney will be able to provide good, legal advice, especially for more complex cases.  At a minimum, an attorney can review your Memorandum of Understanding to make sure your legal interests are covered.  Moreover, if the mediation is not successful (and not all are have positive results), you always have the option of stopping the process and going to attorneys.

Mediation is a potential solution if both parties truly want to settle their divorce without attorneys and litigation.  It can achieve a win-win outcome, address the couples’ interests and concerns, and result in a more positive adherence to the settlement, all at a possible lowered costs.  It is not necessarily the right approach for each couple and each situation – but it is important that both parties know and understand their option.

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August 25, 2009 by wendy.

A lot has changed in a year’s time.  The old rules for financing and refinancing a house are very different than they were during the real estate boom.  So when couples are figuring on how to split assets, they will need to ensure that the spouse who takes the house can actually obtain a mortgage.

The downturn in the real estate market is one big reason.   Homes are often worth less than the price that they were originally purchased, leaving the buyers “underwater” or owing additional funds upon the sale of their house or any refinance.  Appraisals, too, have changed.   Most mortgage lenders do not get to choose their appraisers any longer – but must have an “arms length” relationship.  Appraisers often need two comparables in the neighborhood, two listings under contract, and will include any neighborhood foreclosures in the price.  Furthermore, appraisals are only good for a certain length of time before they must be redone to make sure the price is still accurate.  Lenders really don’t care how nice your house is – only that the value is accurate.

The mortgage scene is also much different.  For one thing, lenders are taking a much closer look at an applicant’s finances.  People with assets but no income need not apply.  So this may eliminate spouses who have received a settlement of cash or other assets, but who have no income, or who are just getting back into the work force.   Lenders also want to see a history of the applicant receiving child or spousal support – some for 3 months, others for 6 months (if the applicant is using support as income for the loan).  And some lenders want to see at least 3 years of child support written in the settlement agreement.  Most lenders will not want to issue a mortgage for a house payment of more than about 28% of the applicant’s income.  They do not want the mortgage to be more than 36% of gross monthly income.  Additionally, credit scores must be good, and most lenders will want a credit score of 720.  Lenders are asking for 10% down for a conventional property, 20% for a vacation property, and 25% for investment property.  VA and FHA loans have different requirements, but some of those can be fairly tough.  Lenders are often treating the “deed in lieu of foreclosure” and short sells as regular foreclosures.  Thus, people having gone through such home “give-backs” may find themselves unable to refinance or receive a mortgage until more time has passed.

Be aware that it is also taking longer to close loans.  The paperwork and disclosures have become more onerous, and so a closing generally cannot be done in less than 30 days.  Many lenders laid off a number of employees last year, so your refinance or mortgage may move more slowly than expected.

What does this mean to divorcing couples?  Some may not be able to refinance their homes because of a low house appraisal.  Others may not be able to refinance at all on their credit, salary, work history, or for other reasons

If a divorcing couple cannot sell the house and cannot refinance the house in one person’s name, there are few options.  Live apart and wait until the housing market comes back?  Have the spouse receiving the homework on their credit and income?  Before any paperwork is signed, it would be advisable for one or both parties to consult a mortgage broker to determine each person’s ability to obtain a mortgage or refinance.  Moreover, they would be advised to consider the worst case scenarios of their proposed settlement and plan for these should they occur.

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August 17, 2009 by wendy.

There is an old joke that family law attorneys tell about divorce that goes like this:  “ Why is divorce so expensive?  The answer is – because it is worth it.”   Although this is dark humor about a very serious subject, I don’t think that divorce needs to be as expensive as it sometimes is, especially if couples do not allow their emotions to get out of control, and are able to work together, rather than to go to court.

With the economic situation as it is, many couples are forced to spend as little money as possible on divorce, often opting to forego legal and financial advice.  While limiting the cost of the divorce is important to most people, doing things correctly is also critical, and most couples are unfamiliar with the legal and financial nuances of divorce.  Most divorced people heal from their divorces and are able to go on with their lives within about a year.  At that point, they then may realize that they have a really crummy settlement agreement, at which point it is too late to make any changes.

Divorcing couples generally have one chance to get things right during a divorce.  According to Fadi Baradihi, CEO of the Institute for Divorce Financial Analysis, speaking at the IDFA National Conference in Chicago, on July 2009, “Do-it-yourself divorce is very likely to create time-bombs for couples who do not understand the legal and financial implications of the agreement they have created and signed using a kit or online service.  This is where a financial professional trained in the special issues of divorce can really help.”

For example, settlement agreements may need to contain a number of clauses to protect each party as the economic situation changes.  What if the house can’t sell?  What if one party wants to get their portion of the equity from the house and the new appraisal indicates that there is less equity than estimated, or worse - a negative equity?  What do they do with the stock options that are underwater?   What if the spouse getting the marital home cannot qualify for the mortgage payments?  How long must they receive maintenance or child support payments to qualify for the mortgage?  Which assets should they select to receive as their portion?  If one spouse is considering bankruptcy, would cash or the IRA be a better asset?  What happens to child and spousal support if the payer spouse dies before the payments end?

I have actually had to adjust agreements as the stock market was falling to include clauses that indicated how “investment experience” on various accounts was to be treated.  In another instance, I was discussing with an unemployed client the possibility of refinancing her house, and the mortgage refinancing rules were changing as the divorce was occurring.  By the end of the divorce, the rules had changed so that she was unable to refinance – she received a lot of assets as a result of the settlement, but had no income.

The Honorable Judge Kathleen McCarthy, in Wayne County, Michigan, sees a lot of pro-se, or do-it-yourself divorces.  She says that so many of them are poorly done and fraught with legal and financial problems.  Her words of wisdom are, “Most people would benefit from spending a least a couple of hours consulting an attorney and/or a divorce financial professional to avoid future problems.”

I understand that most couples going through divorce just want the pain to end and the hassles of divorce to be over.  I have had couples tell me “I don’t care what happens – let’s just get it done and the sooner the better.”  I have had to remind them that this is an agreement that they will be living with for years – so having a little extra time to think things through and to make sure it is right for them is so important.

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July 17, 2009 by wendy.

The last blog I wrote discussed the fact that many people may be too poor to get divorced.  A new twist was described recently in the Wall Street Journal article, dated Monday, July 13, 2009, and titled “What God Has Joined Together, Recession Makes Hard to Put Asunder.”   The author, Jennifer Levitz, interviewed several couples that have gotten divorced, but still live in the same house.  The reason for this situation is twofold:  one of the couple is unemployed and/or they are unable to sell the family house.  According the couples interviewed, they seem to manage their lives OK, even if it is awkward at times.  Certainly it is not a desirable situation, but they have chosen to reside in the same house at least until their financial situation improves.  I saw this situation occur with clients in my practice.  They are still living in the same house, and trying hard to make a difficult situation work, with varying degrees of success.

Ms. Levitz also discusses the fact that couples are delaying the decision to divorce, even though their relationships are not working for several reasons – some are uncomfortable at being single during this recession, or they are waiting until economic times improve.  I found that a similar prevailing sentiment developed after the September 11, 2001 attack and persisted throughout 2002.  After that, the economic situation improved, and people began filing for divorce once they were more financially comfortable.  Eventually couples found a way to dissolve their marriages if they wanted to do so.

Some ideas for people stuck in this situation:

1.      Work on your relationship.  Spend some of the time actively trying to improve your relationship with your current or ex-spouse.   Get professional marriage counseling help if you feel you need it.

2.      Jointly develop some rules or guidelines – about sharing household tasks, respecting privacy, dating, and parenting, for example.  A professional mediator may be able to help you work through these issues and to jointly develop a plan for living together until you can physically live apart. 

3.      Schedule some separate time.  Try not to spend a lot of time together if the togetherness makes your relationship worse.  Find activities to perform in the house that you will do separately, or schedule outside activities with friends and family if possible.

4.      Work on your finances.  Prepare a budget and stick to it.  Cut expenses where you can – be creative!  Review your assets and your liabilities and reduce your debt where possible.  Do a “what-if” budget assessing your expenses for if and when you divorce.  You will need to know this information anyway to make good decisions about dividing marital assets when you do decide to divorce. Contact a financial professional experienced in divorce matters if you need help.

Do you have any other thoughts on how to handle this situation?  If so, please let me know!

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July 8, 2009 by wendy.

Divorce is often devastating enough without having money problems.  Unfortunately, money is often one of the underlying reasons for divorce.  These days, with money in scarce supply, matters have become worse.  Couples who wish to divorce are finding it even more difficult to end their marriages.  Consider the following scenarios:

1)      One or both spouses may have been laid off, or unable to fid jobs even if they wish to return to the workforce. 

2)      A couple may not be able to sell their home in the current real estate market because their mortgage may be higher than their current home value. 

3)      A couple may find that their debts are so large that one or both of them may not be able to actually afford the payments while married, much less when divorced.

4)      One or both parties may not be able to financially survive the expenses of setting up and maintaining two separate households. 

How are people handling this situation?  Although divorce filings are up in many of the Colorado front range counties, a number of couples are filing pro-se, or without legal representation.  This may be workable for simple cases, and can save couples a considerable amount of money.  However, some people may make serious legal or financial errors that can affect them far into the future.  At the very least, couples divorcing pro-se should consult a financial expert specializing in divorce to review their situation, and an attorney to review their final documents.

Other couples are staying together and toughing things out until their financial situation improves, such as one party becoming re-employed.  This may be a practical, although possibly difficult, approach.  Deferring divorce temporarily may make sense if it appears that the bad financial situation is only temporary, and there is no violence or abuse occurring.

 Some couples are opting to physically separate, and live with friends, family, or somehow apart from each other until they are financially able to file for divorce.  This makes a lot of sense, especially if the tension and disagreements are making the household situation unlivable.  While it may postpone the inevitable, at least the couple may be able to live in a more peaceful environment until their financial situation improves.

Other couples are considering bankruptcy, and then divorce.  If they have income, but a lot of debt, this may be an alternative to consider. However, people in this situation should always consult an experienced bankruptcy attorney before making any decisions.  Although bankruptcy attorneys charge several thousand dollars for their services, couples may be able to get themselves out of the burden of extensive debt, and then can go on with their lives. 

The final way that people can get divorced and potentially save money is to consider mediation.  If a couple agrees that a relationship (because of children, family, and/or friends) is important, or they do not have significant disagreements over most of the items in a divorce, mediation may be the right approach for them.

These are the ways that I have heard about couples dealing with divorcing during the recession.  Does anyone have any other approaches that they know of?  If so, please let me know!

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May 26, 2009 by wendy.

I asked Bernadine Merker to write a few words about divorce from the perspective of stress - and how it affects our lives during divorce.  She contributed the following information:

Divorce is a major life event that affects everybody in the family. It is an ending that was not expected and it uproots spouses and children’s plans with an intensity that often takes years to resolve.  As this process begins, many of the symptoms described below develop as people try to cope with the major changes that they are undergoing:  

      Although time often heals, it is important to make sure that these symptoms don’t continue to affect moods, health, and relationships, school and work performance. If they do it is time to seek professional help for both you and your children. A visit to your family doctor and an evaluation with a mental health professional are a good place to start!  As with any other thing in life, the sooner you take steps to deal with it, the faster it is resolved. Counseling can help everyone work through those feelings that arose from the strain of the relationship, and the divorce. It can provide a safe place to move past these feelings and re-claim your life. It can also be a place to learn techniques to cope, calm anxiety, and feelings of loss and anger and restore stability. Asking for help is strength, not a weakness! Getting support at a time in your life when your world feels upside down can only help restore balance and help you get on with your life.____________________________________Bernadine Merker LCSW is a licensed professional counselor with over twenty years of experience. She has counseled children, adolescents and adults who are undergoing major life changes, anxiety, depression, bi-polar disorder and PTSD.  She facilitates CONQUERING ANXIETY, an 8-week workshop designed to provide the tools to manage anxiety/ panic disorders. Her office is located off I 25 in the Denver Tech center. She can be reached at (303) 770-0940.

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March 30, 2009 by wendy.

Tough times, economic and otherwise, often mean people use alcohol and other substances to “help ease the pain”. Unfortunately, alcohol and substance use may have an adverse effect  on the family - possibly leading to estrangement and even divorce.  This blog entry has been contributed by a guest author, Bonnie, Mucklow, LMFT.  See more information about Bonnie at the end of this article.

Alcohol and drug problems have a huge impact on family relationships and cause sixty-five percent of divorces.  Talk shows and radio hosts speak to alcohol and drug abuse as a Family Disease; but members who live with someone with alcohol and drug problems can be angry at this suggestion.  What, ME?  “I’m ok; its he/she who has caused all the problems in our family!”.  Counselors and therapists call it a disease for two reasons.  First,  addictions are based in our neurochemistry and altered pleasure pathways in the brain that make us susceptible to developing dependence on alcohol and drugs.  Second, a whole range of unhealthy emotions, broken relationships and ineffective behavior patterns result in response to the misuse of alcohol and drugs. 

Its useful to understand that the person using drugs and alcohol bears the primary responsibility for how drugs and alcohol hurts family members.  But family members, once they realize that addictive pattern, have a secondary responsibility to break the pattern of secrecy around the behavior, learn new and more adaptive behaviors in response to the alcohol and drug abuse and free themselves of the shame and guilt attached to the alcohol and drug abuse.  Here are a few suggestions:

 - Refuse to keep alcohol and drug abuse a secret from extended family, friends and coworkers- Continue to organize family activities, dinner together and family traditions, with or without the alcohol and drug abuser; these traditions help families protect themselves from the disappointment, fear and anger surrounding life with an addict- Talk directly to the abuser of alcohol and drugs about how their behavior impacts the family.  Avoid threats, lectures, and labels; instead describe matter of factly how the alcohol and drug use impacts other family members and creates problems- Discontinue rescuing the alcohol and drug abuser from the consequences of their actions- Refuse to do for the alcohol and drug abuser what they can do for themselves, ex. calling to cancel appointments, leaving messages for bosses or coworkers, doing household responsibilities for them

Bonnie Mucklow is a licensed marriage and family therapist and addictions counselor providing a range of counseling services to children and families.  Her office is located at Dry Creek and I25.  For further information, call her at 720-488-3822 or check her website at:  www.familiesatfive.com

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December 22, 2008 by wendy.

Divorce can be a frightening process.  In addition to all of the emotions involved in divorce, there are seemingly endless numbers of papers to file, numerous decisions to make, and uncertainties about the future.  Divorce can also be expensive, with filing fees, attorney consultations, possibly selling the house, and having to budget with more expenses but no additional income.  These expenses often add to a divorcing person’s sense of being overwhelmed.

During 2008, I saw a large number of divorces in my mediation practice.  Many couples chose to mediate for a number of reasons – as an alternative to expensive litigation; to be able to shape their own settlement agreements; or perhaps to keep the relationship with their spouse relatively amicable.  Regardless of the reasons, I find myself admiring many of the couples who come to me for mediation.  I think it takes a lot of courage to expose your financial (and marital) situation to a stranger (albeit a professional), and to discuss the dissolution of a once-hopeful and warm relationship.  With the advent of a divorce, people’s dreams are vanishing, and their lives will be changed forever.  It seems easier to have someone else do the fighting for you.  However, rather than having a safe barrier of an attorney who exchanges letters and requests for documents with the other attorney, people are choosing to face their spouses and really work together through their issues to create a settlement that is right for them and their children.  I think this courage, in spite of all of the emotions and trauma, is admirable.  I also think highly of couples who seek out experts to help them wade through the morass of inter-related divorce pieces they must assemble, such as child support, maintenance, taxes, the marital home, and the overall settlement picture.  They can then make informed decisions about their future and avoid some of the nasty pitfalls that can otherwise occur.

It takes courage to face a spouse and make decisions about your futures when it was difficult to do so during your marriage.  However, the process of mediation, while often difficult, uncomfortable, or painful, can make for a healthier and better future for your overall family – and that is truly laudible. 

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December 22, 2007 by wendy.

Many divorcing and single people tell me that they dislike Christmas – it is boring, dull, depressing, and a generally awkward time of year. In trying to understand why many people feel that way, and in an attempt to find a solution, I interviewed my last guest writer for this blog site, Suzanne Simpson, a Licensed Psychotherapist and Coach. I’d like to share some excellent and informative tips that she provided. I hope you find them helpful.

Question: Why do divorcing people feel depressed at Christmas – this should be a joyful time of year?

Answer: “Christmas is a season of giving, but the experience often turns out to be one of so much sadness and depression. When clients are newly single or divorced, they experience a loss of family connections. Moreover, for many clients the image Christmas is based on our childhood experiences or fantasies. These images can create great pain if we see our present experiences as not measuring up to these expectations.”

Question: What is the impact of unrealistic holiday expectations for divorcing people?

Answer: “Expectations that are unmet will usually lead us down a path of emotional pain. Suddenly, we are demanding things of others that they can’t meet. We may try to be Super-mom: choosing just the right gifts, cooking everything we think others will like, and working hard to look good. We compare our lives to those happy families the movies and magazines portray. All of this pressure we place on ourselves can leave us depleted and unable to meet our expectations.”

Question: From what you are telling me, a lot of unhappiness is brought on by our expectations. Therefore, how do we change our expectations?

Answer: “It is important to recognize that what we perceive to bring us happiness will not necessarily be that which makes us happy. For instance when I was a young girl, I thought that if I received the most presents under the tree that would make me happy. I was so eager I would even open a few presents before Christmas and wrap them back up again. At that stage in my development, I was naïve enough to think that getting presents was the answer to feeling good. With more maturity I am now aware that gifts won’t give me those good feelings, but that I can create that within myself. Happiness is an inside job and no one person can give that to us. Creating the right emotional state is key. So, when they say this is a season to be joyful, I believe that it is a feeling we can have now as well as experience all year round.”

Question: Do you have any recommended actions people can take to create the right emotional state?

Answer: “Absolutely! Start monitoring your mindset by placing your thoughts on a daily focus and inner dialogue that makes you feel great. In addition, letting go of the expectations that Christmas needs to meet an image of what you have fantasized it to be. Some of my favorite tips for getting through the holidays health and happy are:
· Think of giving without any expectation for anything in return
· Don’t let your mind go to self-pity or comparison with others
· Practice loving those that are difficult family members
· Be aware of overindulging on sweets or alcohol which spike your insulin levels
· Find contentment in the simple things such as reading a good book, going to see Christmas lights, or spending time with friends and family
· Take advantage of things slowing down to get more rest and practice good self-care
So, turn your sadness into joy and make it the best holiday season ever! You can choose what you want to make it.”

From what you’ve said so far, I would add that I see the holidays as a challenge for many people, but especially divorced or divorcing people. It is especially difficult from a financial standpoint. People are learning to live on one paycheck when it was difficult to live on two salaries. Buying holiday gifts and overindulging can lead to additional financial stress. If your Christmas is blue rather than merry and bright, you may want to try some of Suzanne’s ideas this year – your holiday season can only get better!

Suzanne B. Simpson is a Licensed Psychotherapist and Wellness Coach. She has a private practice in Littleton specializing in helping people going through major life transitions. She helps her clients find empowerment by identifying emotional patterns that keep them stuck and unable to move on with their life.

Visit her at www.connectcoach.com Call for a complimentary introductory coaching session. (720) 981-0713.

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