The New Economics of Divorce - No Home Equity
Posted on October 2, 2008
Filed Under Pittsburgh Family Law, Pittsburgh Legal Matters
It is no secret that we are seeing a peculiar time in US history. Home ownership has traditionally been one of the most significant wealth builders for the majority of families. When it came time to send kids to college, home equity was often a cushion which would be tapped to make this dream possible. If you needed a new car, a home equity loan could help you find the cash to make it happen. One less obvious use of home equity is it enabled couples to have something to split up and yes, pay for a divorce. It seems that falling real estate prices are having impacts on all sorts of American past times. http://abcnews.go.com/Business/Economy/comments?type=story&id=4705137
At its peak, you were 40 - 50% likely to get divorced. That rate had grown rapidly over the past twenty years and even further back. I read one estimate of divorce rates which calculated you were 2 and a half times more likely to get divorced than you were just 20 years ago. As the real estate markets and stock markets continue to soften, it will be interesting to see if divorce rates go down as well. If however divorce is ingrained in American society, then it might be time for quarrelling spouses to demand more efficiency from their divorce or family law lawyers. Examples of being more efficient include requesting flat fees from your lawyer so you have certainty on the costs you will face. For many items such as support hearings, custody hearings or very simple divorces, there is no reason why you can’t ask for a flat fee. It is also a good way to determine if your attorney is truly experienced in this area of law. If a lawyer doesn’t know what pitfalls a case can encounter, it is very unlikely they will agree to a flat fee. However, if they know the area of law, they can at least explain why a flat fee won’t work for your engagement. Some other strategies we use at 1-2-3 Law Group is to provide as much free information as possible online. One example of a podcast on divorce is here.
Another example we utilize is to encourage online communication through our case management system. This cuts down on missing work, gas expenses and parking for the client and lets the lawyer manage their day better. These strategies can all add up to significant cost savings over the course of your divorce, custody or support matter as travel time and attorney communication time is reduced.
Tips you can implement on your own to reduce costs are to have your financial house in order. Don’t pay professionals to do inventories of what you have. Come prepared when you meet with your attorney. If possible, reach agreement with your spouse on economic issues then run them by your attorney to see if your arrangement is fair from their perspective.
Lastly, do not look to your attorney for a shoulder to lean on. If you are working on an hourly basis, this can get very expensive. If you have a flat fee arrangement, your attorney will likely not appreciate having to spend more time than is necessary on your case. However, the grieving process does require an outlet so your friends and therapists are the best bet as opposed to keeping feelings bottled in.
One final tip is if you can, attempt to work things out and stay together. That may be your best economical decision since you won’t have to fund two separate households and split up a shrinking economic pie.
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