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The Pros and Cons of Divorce During a Recession

Publish Date: 12/12/2022

How You Could Benefit from Divorce During a Recession

An economic recession can cause tension in many areas of life, but the financial stressors caused by a recession are a common reason for divorce. The downturn in the economy during a recession often leads to unemployment, and unemployment naturally gives rise to marital disputes regarding finances. If the marriage is salvageable, you owe it to yourself and your family to make it work, but if not, divorcing during a recession may be a good option.

Whether or not there is a benefit to divorcing during a recession depends on the unique facts of each case. If you are considering divorce, there are some specific areas you should pay attention to, regarding case strategy and deciding when to move forward with your case.


Child Support and Alimony Payments

Although job loss and limited income is generally a negative factor, choosing to divorce during an economic recession may be a good thing. Awards of child support and alimony are largely dependent on a party's income and the standard of living maintained during the marriage. An individual's income tends to be lower during an economic downturn, causing child support and alimony obligations to also be lower.

While there is potential for a child support modification or alimony modification action to be filed, the party petitioning for a modification must show evidence of a change in circumstance, and must have the financial resources to hire an attorney and pay court costs. Without a modification, the reduced alimony and child support obligations will likely continue for years to come.

Net Worth

While the decreased value of personal investments, retirement accounts, etc. during a recession are generally not something a person wants to see in their financial portfolio, this decline in net worth could be a good thing during a divorce. For example, a marital investment which was once $50k during a healthy economy, may decline to $40k, or lower, during an economic recession. To divide these funds at a lower value would result in a loss of $20k, rather than a loss of $25k.

Difficult financial times also tend to have a negative impact on the housing market. During a recession, home values decrease because fewer people have the capital to purchase homes. In the end, the party who retains the financial accounts or real estate will take a smaller cut, by dividing the assets at a lower value. The party who retains those assets until the economy recovers and values increase, will have the greater economic advantage.


During a recession, fewer jobs are available and the stock market is unpredictable. As discussed above, the party who retains the real property will likely divide the home at a lower value, but they must also consider the mortgage rates to refinance the home in their name, once assets are divided.

Although divorce during a recession appears to be a good thing for the primary breadwinner, the party with a lower income may find themselves with fewer assets after the property division. Since both income and the value of assets typically decrease during a recession, divorcing during a recession will likely result in the party with a limited income receiving smaller awards of alimony, child support, and division of property.

If you are considering a divorce, it is wise to develop a strategy before you begin the divorce process. Should you have questions regarding how the economy may impact your divorce or if you wish to discuss strategy with one of our experienced family law attorneys, contact us for a free phone consultation.

Written by: Rebekah Ann James


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