Twitter Facebook Myspace

Modern Family Meets the Great Recession and Divorce

By Susan Carlisle, CPA
Valley Lawyer – December 2010
A publication of the
San Fernando Valley Bar Association

An attorney received a frantic call from Steven, a man in his late 40’s. “Please help us. Over the last year the lawyers got the remaining $60,000 equity in our house. There’s nothing left, and we’re not even divorced yet. We’re still living together in the same house. It’s awful. Can we come talk to you right away?” he pleaded.

DIVORCING COUPLES ARE desperately seeking alternatives to making deals “at the courthouse steps.” A trip to the Superior Court in downtown Los Angeles found that a majority of the people in the halls are dressed in clothing from Target or Walmart and few, if any, wear tailored Italian suits. Estimates are that eighty percent or more of the cases are in pro per. The expensive suits are more often sitting in conference rooms in Century City or Encino with private judges at the head of the table.

As the middle class suffers through trauma and disruption, can the family law community justify taking what little remains? In the midst of this jobless recovery, emotional distress is being caused. The impact of the economic downturn will be felt by families for quite some time. The practice of family law will also be transformed, not only as a result of the Great Recession, but as a result of the changing nature of marriage itself.

The normal challenges associated with splitting one household into two in a marital dissolution have been rendered even more daunting. Falling home prices, the slow market in home sales, sizeable credit card debt and home equity loans, along with diminished savings and retirement funds make negotiating a marital settlement agreement even more stressful.

Although there are discussions about giving up on real estate with excessive mortgages, clients think that the market is poised for an upturn in the near future. Only the “ruthless and the reckless” have walked away from their homes (Brett Arends, The Great Mortgage Mystery, Wall Street Journal, Oct. 8, 2010). Most people, especially women, still feel that it is essential to remain in the family residence.

Job loss, or the losses generated by a previously flourishing business, is a real financial stressor that leads to the breakdown of marriages. Men account for about 75% of the decline in employment (U.S. Bureau of Labor Statistics, 2009). The breadwinner has to cope with his declining self- image. Often this triggers depression or exacerbated abusive behavior. Women report their resentment after coming home from work to find their unemployed husband on the couch watching television, or worse, with a bottle of booze. A sudden decline in the marital standard of living is difficult to cope with.

Read more…

The Third Wednesday

Although it may be one of the best kept secrets of the Los Angeles Superior Court, the LACBA/SFVBA-sponsored Third Wednesday Voluntary Settlement Conference Program is designed to turn the misfortune of the current budget crisis into an opportunity to settle cases.  Each family law department in Los Angeles County may assign up to two cases each month to the VSC program, which provides three hours of free mediation on the third Wednesday of each month in the private office of an experienced family law attorney serving as a voluntary settlement officer.

In the event that a case has not been resolved after three hours of free mediation, counsel is encouraged to retain the services of the volunteer mediator to resolve any remaining issues. The program, which commenced in February 2010, had incredible success in March.  Five out of seven assigned cases were completely settled, and a sixth is still engaged in peaceful mediation with a volunteer mediator.

If you’re going through a divorce in Los Angeles County and you’re afraid you’re headed to trial, ask your attorney about having your case assigned to the VSC program.  You’ll be glad you did.