Economic problems have a particular effect on couples whose relationship has hit the buffers. Now that we seem to be heading out of the economic slump, especially as liquidity begins to return to the housing market around the country, we are seeing parties beginning to revisit those interim arrangements. It is remarkable how a more positive economic sentiment combined with rising asset values makes people less risk-averse and more willing to begin to spend time and money unravelling their affairs.
An economic slump is difficult for everyone but those who are experiencing the breakdown of a married or unmarried relationship may feel that a difficult process is made even more difficult. There are many anecdotal stories of people gritting their teeth and continuing to live in the same house until they feel they can afford to separate. The emotional cost to both of them and to their children is often huge. Of course, sometimes the common adversity the couple experience may motivate them to heal the difficulties between them and bring them closer together. However, experience suggests that financial pressures laid on top of the emotional pressures of a relationship breakdown tend to make things worse rather than better in most cases.
Some of the issues which cause people to decide that they should avoid any formal steps to extricate themselves from the relationship are:
(1) Difficulty in selling the family home. Although residential property values remained surprisingly resilient in spite of the wider economic downturn. However, there is little doubt that there have been very great regional differences. London prices continued to rise, along with a few other pockets of prosperity around the country. Other places have either seen falls in prices or a simple lack of activity in the market, making a sale difficult to achieve. Many couples who have decided that their relationship is over seem to have interpreted this as a reason as to why they cannot move on. Some have continued to share the family home, living as two households under one roof. Others who can afford to have separated and dealt with the interim arrangements as best they can. Now that the property market is becoming more active again one or both parties are feeling that changes need to be made. It is a fact that is many of those couples had consulted a family lawyer or mediator sooner some other and more comfortable solution could have been found before now.
(2) Difficulty in raising finance to buy a new home. Although bank interest rates remain low and some mortgage lenders have been offering very attractive rates the lending criteria are often very strict and not everyone has been able to get the best deals or borrow at all. The problems have been particularly acute when the mortgage is a high percentage of the property value or where one or both of the parties are out of employment. Many parties However, once again, if rather than making assumptions which may be too pessimistic, some of those couples had explored their options more fully they might have found a solution before now. An experienced independent mortgage advisor may be able to identify options which are not obvious to the non-expert. A family lawyer can often give advice as to creative solutions to what seems to be an insoluble problem.
(3) No income. Often one of the couple works and earns and the other does not. This financial disparity can leave one party feeling in control and the other helpless and vulnerable. It does not have to be like that. Through negotiation and, if necessary by way of an application to a court, it may be possible to make arrangements which level the playing field for the parties. There may also be options from benefits and tax credits which the parties may not have realized that they have.
(4) ‘We want to wait until the value of our assets increase again.’ That is a perfectly reasonable stance to take and many people have adopted that position. I have seen this most often in those cases where there is a family business which it is difficult to extract value from at the moment. A similar problem arises where there is a holiday home in another European country whose property market has collapsed. However, many people forget that there are ways of sorting out the interim position to make it more tolerable while they wait for the right time to sort out the long-term position. The longer the worldwide crisis that started with the credit crunch more than 5 years ago goes on the more apparent it is becoming that this is not a short-term problem. Even now as the UK economy shows improvements the rest of the Euro Zone is in a different phase of the economic cycle. The growth of the 'BRIC' economies has faltered. Economic uncertainty and volatility used to be the exception but now it seems to have become the norm and in a globalised economy even an island is no longer an island. Day to day events are difficult to understand or predict. For example on the same day that the last set of very pessimistic UK GDP figures were announced share prices in London and around the world were going up:http://www.telegraph.co.uk/news/9827967/Investors-defy-prospect-of-triple-dip-as-FTSE-hits-four-and-a-half-year-high.html
Separation is always tough. Although for some an immediate divorce is the way forward it is not right for all. In fact, delaying a resolution of financial matters can make the whole process much more difficult and expensive once one of the parties decides that the time for a resolution has arrived. Even if a final divorce is not what the parties want, there are many options which can be considered to make life more settled and dignified in the interim period. The options are much greater than many think they are. The sensible thing is to seek advice from an experienced family lawyer so that all the options and their pros and cons can be considered before making a fully informed decision as to the best way forward.