Divorce rate is overwhelmingly increasing in Australia

‘Standard’ divorces might run between $10,000 and $20,000. However, as living expenses rise, more people are opting for less traditional, more reasonable means of splitting up.divorce rate increasing day by day let’s try to figure out the reasons and possible solutions.

Julie and her de facto boyfriend intended to do things on a budget when they split up in 2022. They cohabited for eight months after their divorce and chose mediation over a legal duel because “everyone says that is the least expensive option.”

They also opted against putting their house up for sale. Instead, they want to preserve it as an investment property and continue making joint mortgage payments.

Although it differs from the typical divorce scenario, considering the current economic situation, they feel that it is the best course of action.

Julie and her ex are not the only couple trying to split on a budget. More couples are attempting to divorce on the cheap as the cost-of-living crisis bites, however the term “cheap” should be used with caution because even a pretty ordinary divorce can cost between $10,000 and $20,000.

Of course, a divorce will be more expensive and time-consuming the more you have to divide. Paying the filing fee to dissolve the marriage and receive a divorce certificate might end the marriage if there are no assets to divide or child custody agreements to discuss about dues which might be more then 1k$.

Allen Peter, a divorce attorney in Sydney, claims that even when significant assets are at stake, “clients are a lot more cost conscious than they used to be.”
According to Peter, Julie’s arrangement is becoming more common, with housing costs playing a significant role.

 

There are alternative Plan A, Plan B, Plan C stuff’

 

To avoid selling the family assets and then face “Many couples are choosing to postpone all or part of their settlement in favor of keeping onto joint property, according to Peter, due to either the rental crisis or a massive mortgage due to the high interest rates.

The days of many couples having a clean financial break are passed, according to family court mediator Christina Salvo. They will state that “Plan A” is to keep the property for X number of years, she claims. And if one party is unable to refinance at that point, the other party may assume responsibility for the loan. We now have a tone of new Plan A, Plan B, and Plan C material.”

“More and more people are coming to us and saying, “We want to separate, but we can’t afford to.”Julie claims that the judge was not pleased with their choice to keep their joint residence.

The court prefers that you divide things up and have some degree of ultimate certainty on the agreement since it doesn’t like it when former partners remain financially dependent on one another, according to the expert. But rather than seeking a court order to divide all the assets, we believe that we can remain cordial enough to make wise financial decisions.”

Bird-nesting through a housing crisis

Cohabitation after a divorce for eight months, as it was for Julie and her ex, is also not unusual. Family law attorney Britney Bartal from Melbourne adds, “I have noticed people staying under the one roof for longer than they would previously.” Both availability and cost are driving factors.

However, it can also be strategic at times. She claims that some people worry that if they move out, “the other person will be comfortable in the same environment they’ve always enjoyed,” discussions “might slow down.”

Some couples even choose to keep living together as a long-term solution, choosing what is known as “bird nesting” or a “nesting arrangement,” in which the kids stay in the house while the parents alternately move in and out.

Lawyers like me think it’s a bad idea, Peter claims. Parents “don’t have any real privacy” when they stay with family or in an inexpensive rental when they’re not at the main house.

Because you don’t want your husband to see your documents, you always have to pack up your clutter or live in your car. You find it to be quite uncomfortable, but the kids love it. Never would I advise somebody to do it for more than a year.

For “families that have separation with mutual understanding but are not enemies” and have a sizable plot of land, there is another alternative. Similar to nesting, Peter explains, the parent without children will relocate to the granny flat.
“I’ve seen instances where the mother stays at home with the children and the father is banished to the granny flat. He frequently visits for family dinner, where he spends time with the kids and assists them with their homework. He returns to the granny apartment to sleep after that.

 

Kitchen table resolutions and collaborative divorce

 

It is feasible to separate completely financially (and move out) while continuing to save money jointly.According to Peter, it’s typical for younger couples who have fewer assets to reach a “kitchen table” agreement, in which they sit down, decide how to divide their finances, and then only hire attorneys to create the necessary paperwork.

Since divorce attorneys bill by the hour, this can save thousands of dollars.It costs between 1k$ and 3k$ to have a lawyer design a settlement and submit it to the court, in addition to the filing fee.
It is still possible to reduce costs by using “collaborative law” even when both sides are represented by attorneys. In an ordinary divorce, “you sit in secret with your client and give advice, and it’s all very strategic,” according to Peter.

In collaborative law, a couple and their solicitors sign an agreement promising to negotiate a settlement rather than file a lawsuit. According to Peter, if a matter does end up in court, the attorney “has failed” and must withdraw from the case.

“A very open forum where everyone discuss their thoughts,” adds Peter. To determine what is best for this family, you sit at a round-table with everyone and consult a divorce counselor or financial planner.

Although Salvo provides a service that “contracts couples, not individuals” and charges a flat price ranging from $4k to $14k, depending on how much assets the couple must share, collaborative law is now more popular abroad than it is in Australia. According to her, interest in the “Simple Separation” service has increased double over the past year. A quarter to a third of customers opt to pay in installments as well.

A mediator and a lawyer are assigned to a divorcing couple, and through online sessions, the duo negotiates the division of assets. Salvo claims that doing so avoids the “exploitative” legal costs that can result from approaching a split as two competing parties.

Salvo, however, argues that in order for this to succeed, a couple must be willing to negotiate and not keep any assets secret from one another. “Even if they don’t get along, if they’re both devoted to the process, it’ll work well. It will not succeed if one party is fixated on a result.

Things can still go wrong, even if the split is amicable and undertaken with the greatest of intentions. A compensated third party assisted in deciding and concluding the asset partition during Julie’s mediation. However, after she and her ex started the process, her ex had second thoughts about a few of their initial agreements, necessitating a number of issues being renegotiated.

“We wound up spending as much on solicitors as we did on the mediation agreement itself, she claims. It ultimately cost roughly $24,000, which is more than double her original budget.

Julie claims that she would now urge others to choose wisely at the beginning of a relationship. Prenuptial agreements (commonly referred to as “prenups”) and frank discussions about money management, according to the author, could prevent couples from experiencing post-separation financial ruin.

Prenuptial agreements are not exclusively for rich people or celebrities. Peter concurs that prenuptial agreements can help couples save money if they decide to divorce, but getting one really written costs money. Peter’s rates begin at $9,999, with more complicated agreements costing up to $20,000.

A prenuptial agreement, or “binding financial agreement” as it is termed in Australia, can be created at any stage of a partnership. “It’s a very, very good idea if you can get someone to sign a prenup — it means that you don’t need to do a settlement,” Peter explains.

A prenup effectively ousts the court’s jurisdiction and provides a roadmap for how a separation would proceed. It states that if the couple ever splits up, they must sell the house and I must receive any retirement benefits.

While discussing money with a spouse might be helpful, Julie says that falling in love with someone who already has money is even better. The cheapest option is to get married.

 

 

 

 

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