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trying to divorce, stuck with the house

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As with most people you get to know, there are some things that you probably don’t know about me. Some of those things are unimportant - you probably didn’t already know that I’m a supporter of Liverpool Football Club, or that I have a major snake phobia (to the extent that writing that word makes me uncomfortable).

Although I may have alluded to it, you probably didn’t know that my parents are divorced. They separated a couple of years ago and divorced earlier this year (I think). By the time that my parents marriage began to fall apart I had already moved out of home, and haven’t been materially affected by their separation and divorce (the same cannot be said of all of my siblings).

One of the problems that my mum and dad had in deciding to separate was the house that they shared. Lazy Man and Money pointed out the other day that with the downturn in the US housing market an increasing number of couples that are divorcing can’t sell the house that they jointly own. This is not too different to the situation my family found themselves in. When they put the familly house up for sale, it took them months to find a buyer, and then it took months for the sale to go through.

Let’s think about what that was really like. A couple who had been married for more than 20 years and have several children - some of whom are at college or school and living with them - decide after much thought, effort and heartache that they would be better off being apart. And, they were right, they are indeed so much better off living apart it’s not true.They then can’t sell their joint house quickly and move on with their lives because the thing won’t shift.

They say there’s nothing like living with someone to find all their faults and flaws. There’s certainly nothing like living with someone when you don’t want to, to really make your life a misery. And did I mention that my younger brothers and sisters were mostly living there with them?

In the end, they managed to sell the house for £300k and they’ve bought their own houses that are less than a mile apart. They are both, on balance, happier now than they were and us kids are ok even the younger ones.

Before I added my comments to Lazy’s piece, most of the other commentators mithering on about people getting divorced too quickly, and that this sort of thing could never happen to them because they worked at their marriages. Whatever.

This particular scenario might never apply to you - for example if I remain living on my own, then it’s not exactly likely to apply to me. But, you never know when you might need to sell your house quickly - you might need to relocate for work, or have an unexpected addition to the family, or move to care for a family member. The probability that something like this will happen is, to a certain extent, out of your control.

However, the more flexibility that you have, the more wiggle room in your position, the better able you will be to deal with unexpected events. This is the sort of thing that sensible personal finance is for - being able to roll with the punches, because no matter how hard you try there will be punches. And they probably won’t be the ones that you expect. Spend less than you earn, accumulate savings, investments and think sensibly about the amount of house you need and can afford. These are the basic things that will stand you in good stead.

The lesson to learn is that by not overstretching to buy a house and by maintaining a sensible financial position you can reduce the impact that a major life event has on your finances, or worse on you and the ones that you care about.

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10 comments for “trying to divorce, stuck with the house”

  1. My parents also got divorced after 26 or so years of marriage. Divorce always sucks… but I think it might be worse for people who’ve been together so long.

    Getting divorced isn’t easy and deciding what to do with the house is just one of those things that you have to do. That’s life. All you can do is try to make good choices.

    Posted by JB | April 22, 2008, 1:00 pm
  2. I just wanted to say that I also support Liverpool FC and have a pathological fear of snakes. Sharks too, though they are less of a problem on dry land. Have you seen ‘Snakes on a plane’? I had nightmares for weeks. x

    Posted by Kerstin Doe | April 22, 2008, 3:07 pm
  3. @Kerstin:
    No, I haven’t seen Snakes on a Plane. For me, the clue is in the title and I like my sleep.

    Posted by plonkee | April 22, 2008, 3:58 pm
  4. This happened to me. After no sale for 6 months I had to move out, I couldn’t stay in the house any longer so I gave up. I left and he never sold. I gave it all up.
    Bad idea when looking back now, but at the time I felt I had no other choice.

    Anyway, I musn’t dwell on that there’s an important game on, if I dare to watch it.
    Come on Liverpool!

    Posted by no more spending | April 22, 2008, 5:02 pm
  5. A few comments on divorce.

    1) Divorce rates are not as high (in America) as people seem to believe. The endlessly repeated 50% figure is because, in some years, there have been half as many divorces as marriages. However, those divorces and marriages are different people (excepting, of course, those people who get married and divorced in the same year). If marriage rates decline in the same period (as they did), we would expect the exact same figures to occur, even though 50% of marriages are not ending in divorce. Moreover, some of these divorces were second or even third marriages and people who have divorced once are more likely to divorce again, thus making marriage look worse for the general public than it really is. The correct method to study this is to look at what percentage of people who marry subsequently divorce. Looked at this way, the divorce rate in America has never exceeded 41% for any cohort and divorce rates have been declining (slowly) since 1980. The highest rate of divorce in any cohort (so far) is for people who are currently between 56 and 65, where the men have a 41% divorce rate and the women a 39% divorce rate. I don’t know what the rates are in Britain though I believe divorce is somewhat less common there.

    2) I think it’s unquestionable that people who are committed to marriage divorce at a lower rate than people who aren’t. I am not at all convinced that looking at happiness pre-divorce and post-divorce to determine whether the divorce should have happened is a very good idea. Two-thirds of unhappily married people who stayed married report happy marriages five years later. When we look at very unhappy marriages, the results improve even more. Eight out of ten people who reported “very unhappy” marriages reported happy marriages five years later. Unhappy adults who divorced were no more likely to be happy than the ones who stayed married. A lot of this is probably simple regression to the mean.

    Interestingly, the cause of the turnaround was not always (or even primarily) because of working on the marriage. Other strategies were also successful, from simply outlasting the problems and counting on their going away (which they often did) to accepting a mediocre marriage and concentrating on one’s personal happiness in other ways (preferably not an affair), which then improves the marriage. Sometimes, merely threatening divorce was a method to improve the marriage.

    3) My parents are a textbook example of divorce which was out of their control. When my father became afflicted with schizophrenia, my mother went back into the work force and supported him for five years. Eventually he had to be committed and they had to divorce. This is, obviously, a very small risk, even for myself who has a genetic predisposition. Nevertheless, I have an Insanity Fund set aside for my wife which only she has access to and which could support her for months in the event of my brain going bad. (My assumption is that I might be able to hide it from everyone else, so she may have difficulty forcing me into treatment should that become necessary.) My greatest worry in this (very unlikely) scenario is that my wife, in her devotion to me, might be reluctant to leave even if I start abusing her.

    Posted by Andrew Stevens | April 22, 2008, 5:29 pm
  6. @Andrew:
    Whilst I accept that divorce statistics are misleading, the fact remains that people (for whatever reason) decide that it’s the best course of action, and once that has been decided, they are essentially right. Wanting and needing to move on, and being unable to do so cannot be good. Having financial options open that mean that isn’t necessary is a good thing.

    It’s certainly a reasonable suggestion that my parents could have managed to stay together if had chosen to (whether by default or otherwise). They (or, at least one of them) decided not to, and were then stuck in a house that couldn’t sell. This was probably the least good option of the many that could have happened. Still, as these things do, it has worked out ok.

    Posted by plonkee | April 22, 2008, 7:58 pm
  7. I imagine that would be pretty bad. Another bad idea (one that women are particularly liable to) is having either partner take the house, generally in exchange for a significant part of the investments.

    A house with a mortgage is already a debt and its upkeep is a drain on resources. Whereas investments, particularly retirement ones, are an asset. Unfortunately, if the wife gets main custody of the kids, she may not want to unsettle them further. But generally it’s not a good financial decision…IMO.

    Posted by Mrs. Micah | April 22, 2008, 9:00 pm
  8. Aw, Plonkee, I’m sorry your family has gone through such upheaval. And even more sorry that it got complicated by the house not selling at first. I think you make an excellent point, too, that there are always circumstances we don’t think about before we rush to judgment (I’ve certainly been guilty on that score more times than I care to remember). I’m very glad things seem to have worked out for your family in the end.

    Posted by Chief Family Officer | April 23, 2008, 4:01 am
  9. @Mrs. Micah:
    I also think that it’s generally a bad idea to cling onto the house. Kids can usually stand moving to a smaller place in the same area pretty well, and giving up other investments could leave you in the poorhouse in old age.

    Thanks. I too find it easy to rush to judgement, but then I try to remember that the situation is what it is.

    Posted by plonkee | April 23, 2008, 5:40 am
  10. This is great advice. Just today I was umming and aahing about whether I should buy and actually I would be mortgaged to the 9’s and would have no wiggle room. You are right you never know when you’ll have to sell quickly and or be unemployed. Further affirmation that you need a good emergency fund is needed AND to have a large down payment so you have some space between what the bank owns and what you own incase property prices go down!

    Posted by Frugal Trenches | April 24, 2008, 8:56 pm

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