As we have previously blogged, the majority of couples going through a divorce experience extreme change in their financial situation as they begin untangling one household and establishing two. It seems a little counterintuitive to think that as our economy improves and the average San Diego resident can live a little more comfortably, that more and more people are getting divorced. However, couples have more economic stability today which tends to lessen the financial impact of divorce. Although more money doesn't necessarily lead to unhappy marriages, it does make divorce more practical and affordable for those who would like to end their marriages. During our recent recession many people chose to stay together because their houses were underwater or one or both spouses were unemployed.
Prior to the recession, typically the most valuable asset owned by divorcing couples was the martial residence. At divorce, the parties usually sold their home and began new lives with the net proceeds. During the recession, couples were unable to sell their homes and realize profits because many San Diego homes were underwater. Therefore, in the face of financial ruin and without any reasonable way to live two separate lives, parties remained married. In the past year, home prices have skyrocketed throughout San Diego. In addition, interest rates have been at a (near) historical low which would enable parties to purchase a smaller home with a manageable monthly payment using the proceeds from the sale of the marital residence. Afraid that the value of their home could plummet again, many couples filed for divorce.
In addition to having assets to divide, an improving economy also means that more people are employed (or have a reasonable expectation of being able to return to work) as they consider divorce. If both parties are able to work or one party is able to earn a higher income, they may be able to maintain two separate households once support is ordered. When jobs were harder to come by and many people were laid off after years of steady employment, numerous California residents struggled to support their family living in one household. For any family, there is only a finite amount of income to apportion for support and living expenses of the supporting spouse. When spouses are struggling to maintain one household, separating into two may not be an option.
Further, one or both parties may have more funds available to retain an attorney in an improving economy. Without the requisite legal knowledge required to navigate the divorce process in California, it is difficult for parties to proceed with a divorce. During the recession, many people could not afford to hire an experienced family law attorney to represent them and protect their interests. Therefore, rather than risk being steamrolled or reaching unfavorable agreements, many spouses decided to avoid divorce altogether.