from the Huffington Post March 3, 2011
Can We Please Live Together Separately? Divorce Wannabees in the Age of Recession
Unhappy couples today cannot afford to split up. There just isn’t enough money to pay for two places, especially if one person lost their job. In the olden days, three years ago, the house could be sold and the equity used to buy time, pay off credit card debt, and possibly purchase new, smaller houses for each. During most of the eleven years I’ve mediated divorces, everyone thought it was difficult to divide assets. Now we realize that’s a cinch compared to dividing only debt.
People are stuck living together because they can’t sell the house, and can’t afford [don’t qualify] to refinance a larger mortgage for a buy-out of their spouse’s half of the equity. Couples used to fight over who got to keep the house; now nobody wants it. So the ties that bind may be broken emotionally, but the financial ones cannot be cut. Low earners, usually the wives, blame their husbands for their inability to get a job that can support them. “You agreed I should stay home with the kids, and now I have no skills for any job that pays more than $10 an hour.” Higher earners, usually husbands, blame their wives for not contributing enough income, and for spending too much money. “We’d be fine if we didn’t owe VISA $40,000 for a bunch of electronic toys the kids didn’t need.” The happy exceptions are the younger women, who have a college degree and a profession that brings in as much or more income than their husbands.
Many divorce wannabees are now waiting for the housing market to improve. Without a profitable house sale to bring in cash after separation, couples are left with several undesirable choices. Some are remaining in the same house, with one spouse moving to the basement. Sometimes one spouse moves in with relatives.
A few couples with children are trying a novel approach. The separating couple rents a small apartment, and alternates living there while the other parent stays with the children in the house. Unfortunately, this usually gets old quickly, since the parents feel like nomads with no real home. Plus they are still sharing a bathroom with the person they never want to see again. The more popular alternative makes the children be the nomads between parents’ homes.
Since the housing values crashed, I’m seeing one particular strategy frequently. The plan is for the lower wage earner to move to an apartment, and the higher one to stay in the house and pay the mortgage. Each plans to operate on an extremely tight budget, and plans to use credit if they urgently need something they can’t afford. They will continue to own the house together, and when the market improves, sell, and split the (hopefully) profit.
I lay awake at night worrying about these couples. What if the market doesn’t go up for a long, long time? What if the furnace breaks and the credit limit has already been reached? Divorce is never easy, but during these tough economic times it’s downright scary.