KEY POINTS:
The economic downturn is not only straining people's relationships - it's also never been more costly to break up.
Lawyer Deborah Hollings says people's financial circumstances are deteriorating so fast that separating partners are pressuring each other to reach agreement quickly before what equity they have evaporates as the housing market deteriorates further - "or the third-party creditors start circling the wagons".
When times are tough, people "can't really afford to leave - yet economic pressure is a pretty destructive force on relationships, so the marriage crumbles, even though financially it's not a good decision.
"You still have the same family costs - schooling, food on the table, mortgages - but you have two houses to run."
Hollings is seeing more couples fighting over liability for debt rather than over assets. If you've acquired debt during a relationship and it's for the benefit of that partnership, you will both be liable, even if it isn't in joint names.
Principal of Focus Law, Eva Ho, says people separating can be "very creative" about disclosing their assets and debts. "I've had cases where one partner would create debt where none existed before. It's easy to adduce the evidence to prove its existence."
An example is of one partner trying to increase his share in the home equity by claiming his father had loaned money towards the house.
Creating a loan agreement and pointing to remittance transactions is not difficult, Ho says.
Fathers' advocate Jim Bagnall says women determined to stay in the family home sometimes lay false assault charges against their partners. Whoever moves out has to meet the cost of a new house. If your income is less than $100,000 that extra cost will impact immediately, Hollings says.
Where couples have children, the father is usually the one required to leave, says Bagnall, but the current housing market is shrinking the equity that will be available to buy a new house. He says fathers may be in a situation of paying the mortgage on the family home, child support and the cost of re-housing. The pressure of financial and emotional burdens can drive them to consider suicide.
Child support has increased 200 per cent in eight years, Bagnall says. He believes the amount should be fixed instead of measured against the father's income.
Women don't maintain their earning capacity as well as men and often rejoin the workforce at a lower income, Hollings says. Maintenance, child support and unequal division of relationship property laws are designed to meet these issues.
A Federal Australian report on the economic impact of separation showed women were significantly more affected by the economic consequences of separation than men for the first five years after splitting up but they tend to come right largely due to re-partnering.
In New Zealand, a 2004 Ministry for Social Development study found women usually emerge from a break-up worse off financially than men, especially when they have custody of their children.
Almost a third of women were in financial hardship after one break-up, compared to 18 per cent of men. After two or more break-ups, the figures jumped to 42 per cent and 28 per cent respectively.
Another common situation is that during the relationship only one partner controls the finances. When they separate, even though they may have less money overall, the other partner finds it preferable gaining control of their share.
"Divorce is expensive, people still do it, and the reason is because it's worth it," Hollings laughs.People interviewed for the following case studies requested to share them on the basis that we omitted their surnames.
CASE STUDY: LOUISE
Lousie's husband left her two years ago after a 17-year marriage.
The couple were well off and businesswoman Louise had established their financial position before stopping work to have two children. "Then it was his turn to provide the financial support while I raised our children."
She says her partner has been generous, leaving her and the children in the house with a greater share of the assets and voluntarily paying child support and spousal maintenance amounts under a private arrangement that means Louise doesn't have to work. Her children are at primary school but she doesn't intend to return to work, even as they grow older.
Despite Louise and her ex-husband being in accord on how they would restructure their affairs on separating, she says "money still pours out of the door" and into the hands of lawyers just through the formalisation process under the Property (Relationships) Act.
"It irritates me that you have to spend that money on legal fees which could go towards the children's education or the deposit on a house; and in many cases the situation turns bitter."
CASE STUDY: EDDIE AND PEGGY
Eddie, 30, and Peggy, 28, separated in October last year after being married since 2001. Both work in the insurance industry and they don't have children.
Without substantial assets, the primary separation issue they face is apportioning their debts - mainly significant credit card debt. Peggy says it should be straightforward but "if one person wants to make it difficult, they can".
"It's a huge change," says Eddie. "Before, you're living on two incomes in a stable household, now we have to start flatting again."
Peggy is the higher earner and will retain all of the former couple's assets and most of their debt, but Eddie still feels significant financial effects. "Lawyers' fees are about $300 an hour. Even food - instead of sharing, if you have to get your own, most times if you're single you'll eat out. It's pretty tough."
Peggy agrees striking out single has meant a drop in lifestyle - there's less money for things like going out and holidays.
Eddie says he's worse off now and "the last thing I would tell people is to go through a divorce - if you can work it out, you should".
"Your superannuation's at stake, your savings - even your car.
"It takes 15 minutes to get married," says Eddie, "and two years to get divorced. It should be the other way around."
