August 16, 2010 by wendy.

I have received calls and emails from mediation clients from a year or two ago about one of the party not fulfilling the terms of Settlement Agreement that they both signed.  In some cases, some former clients may have some substance or emotional issues impede their ability to deal effectively with their family situations and moving ahead on finishing financial issues. However, in other instances, the financial issues have surfaced as a major problem, instead of family or children issues erupting.  During these unusual economic times, it should come as no surprise that finances have risen to be the source of major post-divorce conflicts.

The poor economy has made clauses in some Settlement Agreements difficult to fulfill.  Who knew in 2008 that a couple with a very lovely and well-maintained home in a wonderfully upscale area would still be unable to sell it by 2010?  I am sure most people didn’t anticipate not being able to refinance their house after the divorce.  Unfortunately, concurrent with the financial industry meltdown, real estate values plummeted in most areas of the country.  Add in the dramatic change in mortgage refinancing regulations and within a few months, and a person’s financial picture and plans have drastically changed.

So – what to do if your spouse is supposed to sell the house, or refinance the mortgage in his or her own name?  Should you demand that they do so to meet their obligations in the Settlement Agreement?  Perhaps you should, if the individual is really procrastinating.  However, if the other party is unable to meet their obligations to sell the house or refinance the mortgage, he or she may have legitimate reasons for this delay.  The current mortgage may be more than the value of the house, the ex-spouse may have poor credit or insufficient income to meet the new mortgage requirements, and other reasons may be very real and legitimate.  I remind my clients that they do not need to do something rash that rebounds on them.  This is especially true if there is no real and compelling need to fulfill the Settlement Agreement except to have things final.  For example, if one ex-spouse insists that the other spouse sell the house and the value is considerably less that the mortgage, the spouse with the house may just decide to default on the mortgage.  This can seriously damage the credit of both parties.  Extending additional time to refinance or sell the house, or to fulfill other specific parts of the Settlement Agreement might just be to the benefit of both parties.

My suggestion to several clients has been to re-negotiate the Settlement Agreement.  If you can do so, you may want to refrain from involving legal counsel to force the situation unless absolutely necessary – it is expensive and often only inflames the situation.  Put any change to the Settlement Agreement in writing, after which you may want to have legal counsel review it.  Set specific dates by which the issue in question should be resolved.  Ask for proof that the ex-spouse is moving towards fulfilling their obligations, or proof that they cannot do so at this time.  For example, if your ex-wife is required to refinance the house and says that she needs more time, ask to see her mortgage application and any correspondence that is associated with this loan.  If the mortgage value is higher than the home value, ask to see a recent appraisal and a statement from the mortgage company showing the loan value.  You also may want to consider various “what-if?” situations, such as, what if the house really cannot be sold?  Will you then consider a short sell if possible, a default, or another extension?  Be sure to think about all possibilities – the economic situation these days can make any number of alternatives probable.

Often the issues that were some of the underlying cause of the breakup of the marriage still exist.  This means that some former couples are still unable to resolve their post-divorce disputes successfully.  In these cases, the people may wish to contact their former mediator to help them resolve the issues.  Their mediator is familiar with their case and with each of the clients and may be able to help them come to a satisfactory resolution.  This alternative may be better and less expensive than the litigation route, and is certainly worth serious consideration.

Post-divorce difficulties are common – and even more so these days.  It certainly makes sense for former spouses to try to work out things between them, write out their agreement clearly, and show progress being made towards fulfilling the terms of their agreement.  Divorced people have a chance to start fresh and, if possible resolve the difficult issues fairly and productively.  I am convinced it can be an excellent learning and growing experience for them.  It is at least the sensible and practical thing to do.

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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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March 24, 2010 by wendy.

Experts have said that the two biggest reasons for divorce are money and sex for first marriages, and blended family issues for second marriages.  I am not a therapist, and although I do not inquire about “what went wrong” with the marriage, clients often volunteer such information in the course of our meetings.  During the decade or so that I have offered divorce mediation and financial analysis services, I have certainly seen sex and money as probable primary causes.  However, during the mid-2000s, I also saw more “control issues” as root causes, in that one spouse often felt that the power imbalance was too great. Often clients would tell me that their spouse was too controlling, bossy,  wanting to run their lives, or to be in charge of everything, even the minutia of daily living.   

In 2008, I was seeing more couples getting divorced because of money issues.  Often one person was spending more and their partner was uncomfortable about the spending, feeling it was too lavish, too risky, and uncontrolled.  The person spending often felt that their partner was a cheapskate and overly concerned and controlling of money.   One client told me that she wanted out of the marriage before this “house of cards falls,” and she didn’t want to be anywhere near it when it collapsed.  I felt that many of these clients were seeing ahead quite clearly about the future of their personal financial situation, even though they were not aware about the impending downturn in the economy.  I was also seeing more clients on the edge financially, and so I was referring several of them to bankruptcy attorneys for assistance and advice.

In 2009, my divorce workload was down from 2008, and family law attorneys also told me that their caseload was much lighter.  Articles in journals indicated that more people were opting to stay married, at least for a while.  After talking with clients, attorneys and other divorce professionals, it confirmed the assertion of these articles that people were staying together instead of divorcing.  Indeed, many people were either too afraid of the horrible economic situation that America was in at that time, or they felt too poor to get divorced.  Therefore, they chose to stay together and try to make things work, at least until they were more financially stable.  That made sense.  If one party is out of work and the couple has children, it is pretty difficult to divorce and pay for separate households with 50% or more of the income gone.  Moreover, many couples found their house values were worth less than their mortgage balance, and that they would not be able to sell the property without taking a huge loss.  Many others were simply overextended with their credit cards, and moving towards bankruptcy. 

Fast forward to 2010.  I am seeing a new stream of couples coming to see me to help with their divorces.  They usually have the funds to get divorced, and their economic situation is not dire, but their personal relationship has fallen apart for any number of reasons.  I don’t know if this is beginning a new trend or not.  We’ll see how the rest of the year goes – other reasons may be revealed.  With the economy recovering slowly and the unemployment situation still dire, I think that money will resurface as a primary cause of divorce for the next year or two.

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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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October 8, 2009 by wendy.

Although all economies go through cycles, our current economic situation is unusual.  In this particular situation, we had the “perfect storm” economically speaking.  People were in over their heads in credit card debt, their houses had second and even third mortgages, interest rates on debt were increasing, and the value of their homes was shrinking.  Add to this mix the unemployment rate rising, and business incomes dropping and the economy slid into a nasty recession.

Regardless of the economic situation, people will still get divorced.  How do people handle their debt situation, a house that is worth less than their mortgage, and a possibly lower income situation?  In addition to these money woes, what if they are also faced with a possible bankruptcy?

Bankruptcy and divorce become a dicey area.  Which should come first - the divorce or the bankruptcy? 

Let’s say that the divorce is final and your ex-spouse declares bankruptcy.  Even if the under the terms of the settlement agreement your ex is supposed to pay for certain debts, if he or she declares bankruptcy and your name is still on the debt, the creditors can still come after you. You could get stuck with the debt. You may be able to go after your ex in court, but only after the damage is done.  And – you may be able to get very little relief if he or she has very little income or property.  In this case you should consult an attorney. However, in addition to having the creditors hound you, your credit score could be adversely affected, resulting in higher interest rates, an inability to possibly refinance your house, or even to get credit.  To add insult to injury, if you have taken cash as a property settlement in lieu of other assets (such as a 40lK), you may be required to use the cash to pay the creditors.  You, too, may be forced to declare bankruptcy.

Before 2008, many bankruptcy attorneys used to generally tell clients to get divorced and then file for bankruptcy – because this way, the property settlement was firmed up, and clients would know what assets and debts they would receive.  Also, filing bankruptcy after the divorce is initiated, but before the divorce is final, only halts the divorce process until the bankruptcy is settled.  However, economic times have become so tough that many bankruptcy attorneys are now telling clients to declare bankruptcy and then file for divorce after the bankruptcy is settled.  Moreover, if couples file bankruptcy together, they can save the additional cost of another separate bankruptcy filing. 

There are generally two types of personal bankruptcy, and they depend on a number of factors and depend on the size and type of debt, income, etc. 

In a Section 7 bankruptcy, most debts are erased, but there are lower income limits for people to qualify.  In a Section 13 the debtor is put on a repayment plan and a very tight budget.  People with higher incomes are usually placed in this type of bankruptcy program. 

Seeing an experienced bankruptcy attorney before the divorce can help avoid numerous problems.  For example, a client with struggling business was taking money out of his IRAs to fund living and business expenses.  He was also taking a salary from his business.  Not only were taxes and penalties incurred for the early withdrawal of funds from his IRA, but he was being taxed on his salary as well.  Because of withdrawals from IRA, and his salary, he was making too much money to qualify for a Section 7 bankruptcy, which meant that his debt would not have been dismissible.  He would have had to file a Chapter 13 bankruptcy, whereby he would be on a strict repayment plan.  Not only did he create a large, unnecessary tax burden for himself and his ex-spouse, but he depleted an asset that didn’t need to be depleted – his IRA.  Remember - IRAs are generally protected from bankruptcies up to one million dollars.   See a bankruptcy attorney before divorce – or before you withdraw funds from your IRA if you even have an inkling that you might be headed towards bankruptcy.

These days, bankruptcy and divorce often go hand in hand.  It is critical that couples in tough financial situations who are considering divorce, also consult divorce attorneys and financial specialists early in the process.  These professionals can help them with the timing of their divorce and potential liquidation of retirement assets.  To do otherwise can potentially lead to couples losing money that they can ill-afford to lose.

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September 3, 2009 by wendy.

Most couples going through divorce are fortunate to have any life insurance.  Generally the most common type of life insurance is group term life insurance, usually through an employer.  However, some more affluent divorcing couples may have some complex finances, including Irrevocable Life Insurance Trusts, Estate Trusts, second-to-die life insurance polices, life policies with high cash values, and various annuities.  When dividing assets in divorce special care needs to be taken regarding these assets, whether the couple is using attorneys or if they are divorcing pro-se (or do-it-yourself). 

First, these types of assets are not as easy or simple as most people think.  The owner, the insured and/or the beneficiary may be different than one of the spouses believes.  If, for example, the wife is intending the a life insurance policy to “insure” spousal payments of any sort, and the beneficiary is changed or not reaffirmed after the divorce, the wife could potentially lose a great deal of money in the event of the untimely demise of the ex-husband.  Further, if a spouse is intending to use the cash value from one or more of the policies, the stock market fluctuations may have left the policy with no cash value, or worse, upside down and requiring payment of expensive premiums.

These types of assets were usually purchased as a solution to estate planning issues.  With the couple divorcing, the estate plans will need to be revisited.  Assets of this type may not be able to fulfill the original purpose – and may not need to do so after the divorce.  Couples considering divorce may need to carefully review if they have a need to continue these assets in the future, and if they have the income to continue making premium payments.  They may decide to cash out the policies – but will also need to consider any income tax issues that could result

Finally, people with these assets will need to carefully understand what they can and cannot do with them before they sign any settlement agreement.  One of my financial investment colleagues asked me how he was supposed to divide an annuity that one of his clients (a couple) agreed to split in their separation agreement.  Neither of the couple had contacted the annuity company to find out if dividing an annuity pursuant to a divorce was even possible.  I had to tell my colleague to call the annuity company.  The last I heard was that the company declined to separate the annuity – and have no more details. 

The bottom line is – if divorcing couples have life insurance, trusts and/or annuities, they may need to involve the expertise of a person who understands the financial complexity of these assets.  Making any mistakes can seriously cost divorcing people a significant amount of money – and possibly jeopardize their financial future – especially if one of the party is relying on insurance or annuity payments that they may not receive.

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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 10, 2009 by wendy.

It really is true what they say – these days some people are staying married because they don’t have the money to get divorced.  An article in the Wednesday, June 8, 2009 Denver Post substantiates this issue.  Of “certified divorce financial analysts” surveyed by the Institute for Divorce Financial Analysts, 68 percent spoke of clients who could not afford to get divorced because of the recession.  Couples, however, should never give up on the hope of giving up all hope.  Said Fadi Baradihi, the group’s CEO:  “It’s imperative for divorcing couples to keep in mind that the current economic conditions will indeed change.”

How much does it cost to get divorced, recession or not?  That depends on each couple’s situation.  First, there are various fees for filing the paperwork at the county in which the couple lives.  This could be $500 or more.  Couples with children under 18 are required to each take a parenting class, so add perhaps $100 to the tab.  These fees are for couples filing pro se, or without legal representation.  Moreover, these fees do not change, whether economic times are good or poor. 

If couples get stuck and need mediation or divorce financial advice, they can expect to pay for a few hours of consulting time, or for the entire mediation plus having their settlement agreement drafted for them.  Let’s say $300 to $2000, although it could be more or less, depending on the issues.  If Qualified Domestic Relations Orders (separating pension plans or 40lK plans) are required, add on $500 for each.  What about a business, real estate or pension valuation?  The fees vary widely for qualified professional valuations - anywhere from $200 (property valuation)  to $10,000 (business valuation) or more, depending on the asset being valued.  Some people may decide to ask an attorney to review their settlement agreements, and this could run $500 to $1000. 

If all does not go well, and the couple has decided to engage quality legal professionals, these fees will often begin at $5000 to $10,000 each and can go upwards from there, especially if the divorce is acrimonious and they settle in court.  Expert witnesses may be engaged, depositions taken, exhibits prepared, all of which are expensive.  Certainly, it is less expensive to mediate than to litigate. 

The costs of actually physically separating and the couple’s economic circumstances often are the deciding factors when considering divorce.  One caller told me her spouse was unemployed and they could not afford to pay their bills and live separately at this time.  Other people have not been able to sell their house.  They could not afford to make the house payments and pay rent on a separate place for the other spouse.

The costs of filing for divorce and paying for legal, financial, and mediation experts will not change.  However, Mr. Baradihi is correct.  At some point, the recession will end.  People’s financial situations will turn around, especially if they have made efforts to manage their finances in a careful manner.  Until then, people might consider seeing a therapist, getting additional exercise, or somehow managing their stress in a positive way.  Hang in there.  Most people’s economic situations will change as the recession recedes.

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