Economic downturn and what this means for divorce
News article published on: 20th June 2012
The Office for National Statistics has released figures showing that the number of people unemployed in the UK rose by 48,000 to 2.67 million in the three months to December (the highest level since 1995), and women made up two-thirds of that increase.
The number of women claiming unemployment benefits has hit 531,700 – the highest level since 1995.
The question is though – what does this mean to divorcing couples?
Lisa Pepper, a partner and collaborative lawyer explains that, simply, there isn’t as much to go around.
“I see many families heavily mortgaged, particularly in London. When they decide to separate they need two homes with room enough for the children at each. That can be incredibly difficult to achieve. If one parent has been the stay at home carer, they are likely to have a negligible mortgage capacity. Whilst they may receive the lion’s share of the net equity if the property is sold, this might not provide enough for a home. Meanwhile the other parent’s mortgage capacity might well have reduced. Mortgage companies are not lending like they were. If the property is sold, the children might not remain in the catchment area for the good school the parents intended the children to go to. The effects on the family are profound.”
The number of women unemployed also doesn’t bode well. “Many women who have been the stay at home carer are willing to go back to work at least part-time when the children are older, to help the family make ends meet. Working Tax Credits and Family Tax Credits are a great way to make the most of a second income. However it is hard for women returners to get a foothold in the employment market and these statics are worrying”.
“Redundancy has a huge impact on a case and effects maintenance for children and spouse, and a mortgage capacity. We are also frequently seeing heavy credit card debts that need to be taken into account when a couple divorce. Bankruptcy is also becoming more frequent.”
Lisa’s advice to anyone contemplating divorce in this economic climate is: “Try to reach an amicable agreement. Couples struggling to turn one home into two can ill-afford an expensive and lengthy court battle. Consider the collaborative approach and keep costs down.”
Lisa Pepper is a partner at Osbornes. She is a Resolution accredited specialist in (i) Collaborative Law; (ii) financial settlements on divorce; and (ii) cases where unmarried couples separate and disagree on the ownership of their property. The Legal 500 recommends Lisa and describes her as‘constructive and smiling whatever the challenges’. Lisa is a committed member of Resolution, having been elected to its Board of Directors by otherfamily law solicitors, and she sits on a number of Resolution Committees. Follow Lisa on twitter @LisaPepperLaw
Click here and listen to Lisa discuss the latest Office of National Statistics figures on divorce on TalkSport FM.
The family department at Osbornes is recommeded and ranked by independent legal directories Legal 500 and Chambers & Partners. Our specialist family lawyers in London advise on all aspects of family lawincluding divorce law.