Sara Carroll still comes home every night to her ex-husband.
Their 22-year marriage ended nine months ago, but they still live together under the same roof in a desirable neighborhood in northwest London. The global credit crunch has made it difficult for them to sell their home and raise enough cash for the two of them to move on.
“Just at the point the settlement was agreed, and we put it on the market, was when the credit crunch started,” said the 53-year-old Carroll. “So we’re waiting.”
Economic pressure could force any marriage into ruin, but this recession is also affecting what happens after couples call it quits: It can prolong the process or compel husbands and wives to revisit complicated financial arrangements long after the ink on their divorce is dry.
Britain is mired in its deepest recession since the 1980s, as an economic boom led by soaring house prices has ground to a halt amid rising unemployment and the near collapse of the banking system.
And London’s top divorce firms are reporting a surge in business from former financial high-flyers. Desperate for a break from support payments — and with no bonus in sight — they want to re-negotiate terms with their former spouses to reflect changed circumstances.
“These husbands are simply saying, ‘I cannot afford to pay this level of maintenance,’” said David Allison, a divorce specialist at London’s Family Law in Partnership. “And we’re seeing increasing numbers of those.”
Suzanne Kingston, a partner in family law at top London firm Dawsons LLP, says she has also seen a surge in people asking to review divorce agreements — and she doesn’t expect that it would stop with high earners.
Kingston said it is better for couples to negotiate before taking their application in front of a judge, adding that the person who is asking to pay less should be able to show that they have downgraded their lifestyle accordingly.
“Where a family’s spending needs to be adjusted because of the loss of bonuses or jobs, a court is likely to expect that both parties should both bear some of that reduction in lifestyle,” Kingston said.
Similar situations are playing out in the United States, said New York-based divorce lawyer Raoul Felder.
“We have cases where people have just divorced and they’re seeking modifications downwards,” Felder said. He added that there are people who want to divorce but can’t even afford the legal fees.
“We’ve actually seen some cases where they’ve come in, said they hate each other, but can’t afford a divorce,” Felder said. “We see the same big money divorces, but the big money is not the big money it used to be. There’s nobody as rich as they once were, except bankruptcy lawyers.”
For Carroll and her ex-husband, an editor, the recession means the split they finally agreed to is less of a clean break and more like pulling a Band-Aid off slowly.
Because Carroll and her former husband are trying to get enough for two new homes out of their old one, they’ve been forced to reject low offers; in once case they were disappointed to see a good one fall through.
Halifax, Britain’s biggest mortgage lender, found that house prices in Greater London slumped by 16 percent in 2008, and most forecasters believe 2009 could see an equivalent fall.
Carroll’s two daughters, aged 16 and 20, are ready to move with her and have been excited about finding a new house, chatting enthusiastically about redecorating and new bedspreads.
“We had chosen furniture, to make a new start, (to show) that things had changed,” Carroll said. “But they haven’t.”
Meanwhile, the family makes do.
Carroll and her former husband have tried to rearrange the house so they both have their own bedrooms, but there are space limitations. Their clothes remain in the master bedroom closets, so they inevitably run into each other. They share groceries — after all, there is no point in having two bottles of milk in the refrigerator or making two separate dinners.
“We’re like, ‘What should we cook? What should we watch on telly? And I think, ‘Oh, God, we shouldn’t even be having this conversation,” said Carroll, who works in facilities management. “Who is this ‘we’?”