Monday, September 22, 2008

Contradiction

The Lawyer reports today that the credit crisis has sparked a rush on divorce proceedings, appearing to fly in the face of other evidence that the crisis is actually forcing more couples to stay together because they cannot afford to divorce. So, who is right? Well, my view is that if there has been a rush it is only amongst wealthy couples, where one spouse is looking to secure the family assets. Amongst those of more modest means, I suspect the truth is that the crisis is preventing them from separating, because they can't sell the matrimonial home and/or can't afford to live separately.

4 comments:

  1. John

    We have been finding that many couples we deal with are getting divorced and having an order for sale but continuing to live in the same house ( or at Mum's) until the sale has gone through. This is not a problem for most couples who will be dealing in percentages as when they come to buy the property being purchased will also have come down in price.

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  2. Thanks for that, Mike. Of course, there would be a problem if the price dropped so much that it exhausted any equity.

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  3. John

    Anecdotal, I know, but we're finding that our stream of new private work cases is looking a more than a little arid.

    I wouldn't say my firm is at the "top end" of private work (ie particularly wealthy clients). Indeed, a reasonable percentage of our private clients are those who, a few years ago, would have qualified for Public Funding. The majority of private clients though have been in the middle-class middle-income bracket.

    I'm pretty certain that it due to not having the disposable cash to pay legal fees and fears over the property.

    Of course, if you are the partner / spouse wishing or likely to buy out the others' interest in the FMH you are more likely to press ahead now, and I would expect that to keep the numbers more bouyant than they seem to be, if it was down to this alone.

    Our Legal Aid (CW) matter starts on family is increasing, which makes me think it's more about cashflow - funding a divorce - than it is about assets.

    Necessarily though both must be playing a part.

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  4. Good points, and I agree. Thanks.

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