The economic trends of the past year were discouraging in many ways, and they have continued into 2023. Inflation closed out 2022 with a 6.5% increase. The S&P 500 lost nearly 20% in 2022, recording its worst year since 2008. These negative economic trends have an impact on couples considering whether to file for divorce. Additionally, these factors can force already-divorced couples to consider seeking modified divorce orders. A Bethesda divorce attorney can help you evaluate, given the current state of the economy, whether this is the proper time to seek a divorce or modify your divorce decree.
The State of the Economy Impacts Divorce Rates
Historically, the state of the economy has helped to determine divorce rates. From 1929 to 1933, during the Great Depression, it was reported that divorce rates dropped approximately 25%. Cash-strapped couples felt that they could not afford to divorce.
According to Philip N. Cohen, a sociologist at the University of Maryland, divorce rates dropped after the U.S. economy took a hit in 2008. This was largely due to the fact that it’s expensive to divorce, and many couples could not afford it. Cohen claims that divorce rates have been increasing in the decade since that time because couples can finally afford to end their marriages. Cohen estimates that from 2008 to 2011, approximately 150,000 divorces that would have occurred did not, due to the poor economy.
However, a direct correlation between a divorce and the economy is often difficult to make. It’s true that financial hardships exacerbate stress and tension within a marriage, but money problems are rarely the only reason that a couple decides to divorce.
Divorce During Covid-19
Not surprisingly, divorce rates dropped during the emergence of COVID-19 in 2020. Still, it’s hard to know how to evaluate the numbers. Most courthouses and legal offices were closed during the peak COVID times. Experts think that divorce rates will continue to rise in 2023 now that the economy is open, as are law offices and courthouses.
Should You Divorce Now or In Stronger Economic Times?
If you are the payor party, divorcing in weaker economic times means you will likely pay less in spousal support/alimony and child support. There will also be fewer assets to divide in an equitable distribution. By contrast, the spouse who will be the recipient of such support may want to delay divorce until the economy is stronger in order to receive a more generous settlement.
But economic issues aren’t the only factors to consider. Other issues that need to be considered in a divorce are as follows:
- Separation Agreements – Putting a separation agreement in place allows you and your spouse to manage issues related to your property, finances and children as non-confrontationally and effectively as possible prior to receiving a divorce decree. If you want to seek a “no-fault” divorce, you and your spouse must live apart for 12 months. If you don’t have minor children, you can proceed with the divorce without waiting for the 12-month period.
- Property Distribution – If you don’t have a prenuptial or postnuptial agreement regarding property distribution, your property must be divided according to the principles of equitable distribution. However, your separate assets are not subject to distribution.
- Debt Distribution – In addition to dividing your marital assets, you and your spouse must divide your marital assets. Dividing debt can sometimes be a tricky situation, particularly when debt is primarily in the name of one spouse.
- Alimony – When negotiating alimony, Maryland law establishes a long list of factors divorcing spouses must consider.
- Child Support – For spouses with minor children, calculating child support is a necessary part of the divorce process. Most couples will need to calculate child support in accordance with Maryland’s Child Support Guidelines; however, high-income spouses may need to consider other factors.
This is not an exhaustive list of things to consider during divorce but should help you start thinking about key issues.
Modifying Divorce Orders During Difficult Economic Times
Many people who lost their jobs during the pandemic are still not working. Others may be working but had to take a drastic salary decrease. Still, others may have incurred significant medical expenses due to COVID or other circumstances. Many businesses failed during COVID-19, or are not generating adequate cash flow. If you have divorced and one of these scenarios has impacted you, you may want to consider having your divorce order modified.
How To Get Your Divorce Decree Modified
If you’ve had a significant change in circumstances, you may need to petition for modifications to your child support and/or alimony payments. Job loss, a reduction in income, extreme illness or injury and other factors are possible reasons to have your support obligation reduced. With the proper justification, you can modify a court order’s financial or child-related agreement with help from a Bethesda divorce attorney.
Under Maryland law, either spouse can request a divorce modification in the event of changed circumstances. What qualifies as a significant enough change in circumstances to justify a divorce modification? Maryland courts generally will consider a motion to modify a divorce decree if:
- Either spouse’s income has either substantially increased (a new job or raise), or decreased (job loss or cut hours)
- One of the spouses must move, making the original custody or visitation schedule impossible or unreasonable
- More money is needed to properly care for a child who has a change in medical needs, college tuition, or other circumstances
- An inheritance changes either spouse’s financial situation
- There is evidence of fraud by one of the spouses, which is discovered beyond the 30-day decree appeal deadline
- A child’s health or well-being is suddenly at risk from abuse or other circumstances
Protect Your Interest with the Help of an Experienced Bethesda Divorce Attorney
Contemplating divorce is hard enough as it is. Factoring in the rise and fall of the economy, which is not within your control, makes decision-making even more difficult. To speak with Bethesda divorce attorney Brandon Bernstein in confidence, please call 240-395-1418, or TELL US HOW WE CAN REACH YOU ONLINE today.