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VOL. 124 | NO. 89 | Thursday, May 7, 2009

After Economy Induced Détente, Divorces Rise Again

By Rebekah Hearn

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The recession hit hard late last year, giving many couples another reason – besides the holiday season – to put off filing for divorce.

Splitting up real estate, stock options and deciding on custody issues were reasons many people avoided filing for divorce during the worst of the recession, divorce attorneys say.

But local lawyers note that between four to six months after the worst of the recession hit, the numbers have been picking back up – and quickly.

Reasons, reasons

Larry Rice, a senior member at Rice, Amundsen & Caperton PLLC, summarized the relationship between divorce and the economy.

“When people suffer an emotional trauma, like the economy going bad, they cling to each other – not so much out of love as fear,” Rice said. “And when that happens, there’s a drop-off in new divorce filings.”

When the economic realities started hitting home for many in fall 2008, Rice said divorce business dropped in his practice.

“When the consumer confidence started going south, say, in October 2008, I don’t think there was any question (that couples were putting off divorcing),” said Miles Mason, a founding partner at Crone & Mason PLC.

In the normal cycle, Rice said, the uptick in divorce cases starts in September, because many people think of the calendar year as beginning in September – a result of years of schooling.

Then the holiday season and the calendar New Year slow down divorce filings – and so does Valentine’s Day. But once spring hits, Rice said, he has noticed another bump in divorces then.

“I noticed this about a decade and a half ago, and the trend has stayed fairly steady,” he said, but for “two exceptions that I’ve seen: (Sept. 11) and when the bottom fell out of the economy last year.”

Mason, who is active in the American Bar Association’s Family Law Section, said the section members consistently discuss these types of divorce trends – and the trends are not just local, but national.

Recovery period

After four to six months after the emotional trauma that might have caused a couple to hold off their divorce ends, the recovery period begins.

“When people get habituated to their fears, which usually takes about four to six months, it’s kind of like (they say), ‘OK, I’ve dealt with that. Now I can go forward,’” Rice explained.

Mason also said a period of four to five months was the standard he’s seen in terms of couples dealing with their relationships and the subsequent legal action.

“Basically, the gist I’ve gotten (from the ABA Family Law Section members) falls in with my practice as well. Folks held back filing in November and December, but have since picked up the filings,” Mason said. “They held it out four to five months at most, and then most people have filed in February, March and April of this year.”

As a result, both lawyers say they recently have seen an uptick in divorce cases in each of their practices.

In a February article published by The Connecticut Law Tribune, author Douglas Malan said “many (people) are deciding to stay married simply because of the high living costs involved following a separation.”

“Because of the soured economy, income is shrinking rapidly for some workers, and spouses who might count on alimony and child support to run a separate household can’t count on that money anymore,” Malan wrote.

While these facts are true, Rice pointed out that financial reasons usually are not what hold people back from divorce. It’s the emotional upset, or the potential for it, that keeps them together.

“I’m not saying nobody looks at it this way, but I’m saying that relatively few people (do). If you pulled out a calculator and you’re trying to figure out, ‘Am I going to get divorced? Well, if I could make three more hours of overtime at work, I would leave my family,’” Rice said. “I don’t think many people do it that way.

“And if they do, you want to divorce them anyway.”

‘Worst of both worlds’

But the hard fact of money is there, and when a couple does divorce in a “soured” economy, there are financial factors to consider, especially if the couple owns a house.

“That has been a big problem for people,” Mason said, citing lower selling prices in homes in Memphis and in Nashville, where he has another office. “A half-million dollar home is just not worth a half-million dollars right now.”

Splitting stock portfolios and other complicated financial issues aside, the divorce itself will cost money – and the common belief that a divorce from bed and board, colloquially known as a “legal separation,” is cheaper or easier than a full-fledged divorce is incorrect, the attorneys said.

“Legal separations don’t make a lot of sense unless there’s a particular need served by them, which, 99 percent of the time, if someone’s talking about a legal separation, it’s because there needs to be a continuation of health insurance coverage (for one spouse),” Mason said. In addition, the costs of both are about the same.

Rice also said his firm doesn’t advise people to seek legal separation unless there’s a tangible need for one.

“It’s kind of the worst of both worlds,” Rice said.

The cost of a divorce is one reason many people are choosing to represent themselves in court. But pro se representations can cause irreparable damage to a person’s case, Rice said.

“The Tennessee Supreme Court keeps urging people equal access to justice with the concept that people are going to be able to represent themselves, to the extent that it actually encourages people to represent themselves,” Rice said. “It’s setting those people up for a disaster. There are a thousand details to keep your eyes on.”

By the numbers

The data back up the lawyers’ observations. In Shelby County, the number of divorces filed in October 2008 totaled 216 (with and without children). In February, divorces reached 306, a 41.2 percent increase compared to October, according to The Daily News Online, www.memphisdailynews.com.

Shelby County Chancery Court saw 59 divorces in October, with 27 involving children. Circuit Court saw 157 divorces that month, with 78 involving children.

In February, Chancery Court showed 87 divorces with 47 involving children. Circuit Court showed 218 divorces with 110 involving children.

Fast-forward to April, and the data show a slight decrease compared to February. Two-hundred-ninety-three divorces were filed in both Shelby County courts, with 163 cases involving children.

Divorces involving children obviously are more complicated, and of the couples who have already divorced, Mason said he has seen more people who need to adjust their custody-related payments.

“I’ve got several alimony modification actions pending, where people are very close to retiring and then are not able to do it,” Mason said.

Financial problems can hold up the divorce process, making it more difficult than it already is.

“Legitimately, money issues are more pressing and more negative than they have been for a long time,” Rice said. “We are dealing, at my firm, more than at any other point in my memory … with more bankruptcy/divorce combination issues.”

PROPERTY SALES 207 263 9,865
MORTGAGES 197 246 10,862
BUILDING PERMITS 138 686 21,643
BANKRUPTCIES 0 256 6,219