Uncontested Divorce in 2023
An Uncontested Divorce Can be a Benefit in a Recession
An economic down-turn may be a nationwide condition or it could be a financial condition in a single family. If one of you has lost a job and is having difficulty getting new employment, even if the American economy is booming, it is a major downturn for the individual and his/her family. When you are not fully employed with dignity you are in a recession.
Right now, we do not really know where our economy is headed. There are lots of mixed signals. While high-tech companies are laying off thousands of workers, other companies are having record profits. There is a sense of uneasiness in the country today and that translates into stress and strain on all of us.
A recession can create tension in many areas of life. Almost all of the people we help with an uncontested divorce are experiencing money problems – often very severe financial troubles. Money problems are a common reason for divorce. Money problems naturally causes marital disputes. Some couples can work though the hard times and come out with an even stronger relationship in the end. If your marriage is salvageable, you need to work with your partner to stay together. But, if you cannot, an uncontested divorce may be your best option.
Everyone’s circumstances are different. So, whether you will benefit from an uncontested divorce depends on your individual situation and the facts of your case. Sometimes you really have no choice if your partner has decided to move on without you. Whether the divorce is your decision or your partner’s decision, many of the choices are the same and the benefits of an uncontested divorce may apply in either case.
Some Benefits of an Uncontested Divorce in a Recession
Of course, job loss or reduced income is generally a negative factor. But, choosing to have an uncontested divorce during a recession may actually be a good thing. Child support and alimony largely depend on a party’s income and the standard of living maintained during the marriage. So, if your income is lower, that will also probably cause child support and alimony obligations to also be lower.
Additionally, by their very nature, an uncontested divorce is going to always be cheaper, faster and easier than a contested case. Why spend thousands (that you may have to borrow) for a contested divorce when you can spend far less and get on with repairing your life (and finances) with an uncontested divorce? Naturally, you and your partner have to agree, compromise and cooperate to have the benefits of an uncontested divorce. But even if you do not fully succeed in having a fully uncontested divorce you can at least give it a try before going the contested route. You may actually manage to pull off an uncontested divorce when you did not even think it was possible.
During an actual economic recession, no one likes to see his/her 401(k) and overall net worth plummet with the stock market or the housing market. But this decline in net worth could be a good thing during a divorce. For example, a marital home which was once $500k during a healthy economy and a strong housing market, may decline to $400k, or lower, during an economic recession. To divide the equity in the home at a lower value would actually result in a smaller loss to you than it would have been when the value of your home was $100k higher. Generally speaking, the party who retains the financial accounts or real estate will take a smaller loss because of the lower value until the economy recovers and values increase. He/she will then actually gain more in the long run.
The Downside of a Divorce During a Recession
While a divorce during a recession may actually be a good thing for the primary breadwinner of the family, the party with a lower income may come away with fewer assets after the property division. Typically, both income and the value of assets will decrease during a recession. Therefore, divorcing during a recession can result in the party with the lower income receiving smaller amounts of alimony, child support, and division of property.
Furthermore, during a recession, fewer jobs are available, incomes may be reduced and investments performance is unpredictable. As discussed above, the party who retains the real property will likely divide the home at a reduced market value. Often, they may have to incur costs to refinance a joint mortgage into a new loan in their own name. Additionally, the mortgage rate to refinance the home in their name could be higher and they have to pay all of the costs of the home without help from a partner.
The Parties Must Cooperate in an Uncontested Divorce During a Recession
If you are considering a divorce, it is smart to develop a strategy with your partner before you begin the divorce process. It is essential that you honestly and fully discuss the financial issues that you both can expect to be a part of the divorce and try to agree on the outcomes that benefit you both (or at least reduce the financial harm to each other). Many couples with complicated financial situations find it necessary to hire a Certified Divorce Financial Analyst to help prepare for the divorce. Then, an experienced divorce attorney can turn the financial plan into a Settlement Agreement for an uncontested divorce.
Contact Us About Your Upcoming Divorce
Should you have questions regarding how the economy may impact your divorce or if you wish to discuss strategy with an experienced family law attorney, we recommend that you complete our Client Intake Form to start that process.