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Recession makes breaking up harder to do

MINNEAPOLIS — A couple recently stopped by divorce attorney Ron Ousky's office with lousy news. The husband's income was just slashed by $100,000, and the couple needed an unbiased financial planner to figure out if they could still afford to split up.

They delayed their divorce by several months to rework finances and whip up a new settlement based on lower income.

You've heard of love in springtime. This is divorce in recession.

Layoffs, wage cuts, foreclosures and other financial setbacks are forcing many couples into reworked settlements, creative separations and postponements, divorce experts say. Enrollment in self-help classes for divorce is also rising.

"There are a lot more complex situations that we have to deal with because of the recession," said Amy Wolff, owner of AJW Financial Inc., which advises divorcing couples. "I have seen many more husbands and wives where one of them is laid off. It's certainly more difficult to divorce when they (suddenly) have one wage."

Some marriage-weary spouses opt for mediation, which costs less than fighting in court, Ousky said. More divorcing parties are representing themselves to save on legal fees. More people are also asking state courts to waive divorce filing fees because they don't have the cash.

The National Marriage Project recently reported that divorces fell 4 percent in 2008, the first drop since 2005. The American Academy of Matrimonial Lawyers reported that 57 percent of its 1,600 members have seen divorce filings plummet.

The scenario turns all the crueler when you throw in the conversion of one household into two.

"Some (spouses) are agreeing to stay in the basement just because they are waiting for the market to improve" before finalizing a divorce, said Nancy Peters, public affairs director for Hennepin County District Court in Minnesota.

Others haven't even started the divorce process because they don't have the money, she said.

"I know one guy moved into his car after splitting with his wife, but he didn't want the kids to see that he was homeless," Peters said.

In another case, a man told his wife he wanted a divorce, but then was told he would soon lose his job. Selling their home to save on the $2,000-a-month payment wasn't an option because four other houses were for sale on the block. Instead, the husband moved into the basement, where the woman ran her photo studio business.

"I was bewildered for months," said the woman, who asked not to be named. She began looking for a job with benefits. But no one hired her.

Shannon Helland, the divorce mediator who assisted the woman, said other divorcing clients also have faced hard choices, often because of big declines in income and home values.

Wolff, who tries to offer neutral financial advice to divorcing couples, said those who postpone the legal process need help managing bills, restraining credit card debt and separating their finances while under one roof. "We come up with short-term or interim budgets and agreements for how they can handle the finances until they find employment again," she said.

THIS COULD BE SPLIT OFF FROM MAINBAR:

Families determined to split are asking for help. Here are some of the measures being taken in Minnesota to help them reach their goals.

• The Center for Negotiation and Justice at William Mitchell College of Law in St. Paul, Minn., offers a pilot law class each week in Ramsey County District Court for people who want advice on mediated settlements and how to represent themselves.

"Every year it gets bigger," said the center's director, Jim Hilbert, a lawyer who teaches the class.

• Minnesota State Court information director John Kostouros said more indigent and low-income people are asking for a waiver of the marriage dissolution filing fee — typically $300 to $400. A new self-help video on divorce is one of the most heavily viewed items on the state courts' Web site, he added.

• Sherry Bronson, owner of LifeCraft Divorce Seminars in Wayzata, Minn., offers one-day or weekend classes to help women who don't know where to start in the divorce process. The courses feature experts in law, real estate, financial planning, taxes and mental health.

It's been tough on her clients, Bronson said. Many "have no money or have to be retrained into new professions. And they were depending upon their home to be their retirement. Now they are just terrified."

Recession makes breaking up harder to do 02/27/10 [Last modified: Friday, February 26, 2010 5:07pm]
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