Bloomberg reports that “hard economic times” were to blame for the decrease in divorce rates during the economic recession, which began in June 2009 and lasted for 18 months. Since the end of the recession, divorce rates have increased at a startling rate. Approximately 2.4 million Americans divorced in 2012, and that number continued to rise throughout 2013.
During the recession, divorces were at a 40-year low! That means couples were staying together simply because the economy was down, and they couldn’t afford to break up. These surprising statistics have many Americans wondering: Just how expensive is a divorce?
The Cost of Divorce
According to Rochester, Minnesota lawyer, Bruce Cameron, the average cost of a divorce is between $15,000 and $20,000. There are cheaper alternatives, but Cameron warns those routes could actually end up costing the family more money because property negotiation and retirement benefits may not be included in awards and settlements.
Joint and individual credit is another important factor when it comes to divorcing. Couples must consider how much of their personal investments, credit accounts, and bank accounts belong to their spouses. These blurred financial lines can make figuring out debt and payment obligations difficult, and can also result in expensive court and lawyer fees. “The best way to ensure this doesn’t happen might be to sit down and come up with a comprehensive plan for how to handle accounts that are held jointly,” advises the Credit Repair blog.
These expenses are clear indicators as to why families stayed together during the 18-month recession, but they don’t quite explain why record numbers of divorces are taking place now. It’s not like the cost of divorces has decreased with the recovering economy. Divorce is still expensive, and yet more people than ever are opting to pay the penalties and leave their marriages.
Leaving the Unhappy Marriage
Amy Derose told Bloomberg that she and her former husband were forced to stay together during the recession in order to keep their engineering firm afloat.
“The business was hanging on by a thread and we had to hang on…We couldn’t afford to split. He needed me in the business and I needed him.”
Despite how unhappy the marriage was, Derose and her former husband, continued to live and work together until such a time when their business recovered. The economic recovery allowed the couple to finally move forward with their divorce proceedings. They could finally afford to separate and they did. Perhaps, the upswing in divorces is directly related to the amount of couples that stayed married during the recession, and who are now finally able to afford the expenses of a divorce.
Does this mean the divorce rate should decrease in coming years? Because it’s been a few years since the economic downturn, most of the couples who withheld divorcing during that time may have become divorced since the recovery, and thus the divorce rate may go down in coming years. There aren’t any studies to prove or refute this idea, but economists are actually hoping for the opposite!
Divorces are Economically Beneficial
Bloomburg reports that divorces are “contributing to the formation of new households, boosting demand for housing, appliances and furnishings and spurring the economy. Divorces are also prompting more women to enter the labor force.”
As sad as the high divorce rate is, it may actually be a contributing factor in our country’s quick economic recovery.