As the South Florida economy slows, so do divorces

  • by: Julie Kay 11/20/09

With the economy sputtering, South Florida couples are staying together more or attempting do-it-yourself divorces rather than paying pricey divorce lawyers.

As a result, local divorce lawyers say they are facing their slowest period ever, and are discounting rates, offering sliding payment scales and military discounts and accepting credit cards. One said her business is down 35 percent from last year.

``I have people who find out what the consultation fee is and then they don't make the appointment,'' said Hollywood divorce lawyer Caryn Grainer. ``They're too embarrassed to cancel. I laugh when people say the recession is over.''

With the economy faltering and pink slips flying, couples who were thinking of divorcing may think again. The husband or wife may have been laid off and now left dependent on the other's health insurance, or cannot afford to get his or her own place.

Additionally, the house may be in foreclosure or underwater, which means it can't be quickly sold and therefore there are no assets to be divided up.

All this means that divorces appear to be on the decline.

According to court statistics, 16,868 divorces were granted in 2006 in Miami-Dade, 16,005 in 2007 and 14,631 in 2008. In Broward, 11,179 cases were filed in 2006, 9,876 in 2007 and 8,924 in 2008.

At the same time, requests for modification of divorce agreements are way up, as one spouse may not be living up to the terms of the agreement. Requests for modification packets from the Miami-Dade courts rose 19 percent from September 2008 to September 2009, according to Judge Sandy Karlan, who heads the administrative family division.

And sales of do-it-yourself divorce packets -- which cost $65 -- rose 6 percent in that same period.

``I'm seeing a lot of petitions to modify support payments and motions for contempt for nonpayment,'' Karlan said. ``I'm also seeing a lot of couples continuing to live in the house together after the divorce over the last year.''

The problem appears to affect the lower and middle classes more than the wealthy.

Some may see a lawyer initially for a free consultation with no intention of hiring the lawyer, just attempting to pick his or her brain for advice.

Lawyers are also dealing with former clients who had settlements in place, but one spouse can no longer live up to the terms of the settlement.

WORTHLESS ASSETS

That was the case for Aventura attorney Charlotte Karlan, who recently got a call from a couple who divorced three years ago with an amicable agreement for the husband to pay the wife $74,000 when the house was sold in two years. After two years, the house was upside down -- it was worth less than the mortgage -- so he could not pay her. Karlan had to renegotiate an agreement with the couple in which the wife agreed to a significantly smaller settlement to be paid out of his 401(k) plan.

``This is the worst I've ever seen business,'' said Karlan, who has been practicing for 25 years. She's now offering 20 percent discounts for the military and discounting others on a case-by-case basis.

``You can't ask for the same level of pay that you did before the economy took its dive, unless you are a powerhouse attorney whose clients are recession proof,'' said Karlan, who formerly charged $350 to $400 an hour.

Chastity Perez of Pacheco Perez Ortiz in Miami said the firm handles a more working-class clientele and has instituted a sliding scale fee.

``We give them a payment plan -- pay half now and half later,'' Perez said.

Perez said her firm decided to dramatically lower rates after undergoing a ``very slow'' summer.

Miami divorce attorney Larry Katz, who typically handles higher income families, said the biggest problem is the house formerly was the biggest asset and now, neither side wants it. ``You're dividing liabilities instead of assets,'' he said. As a result, many divorcing couples are being pushed into foreclosure or bankruptcy.

If the couple has no children and few assets, they frequently opt to handle the case pro se. They may go to a lawyer for a free consultation and then head to the Miami-Dade self-help program.

Randi Boven, a Hollywood divorce attorney, is spending time these days fixing mistakes made by clients trying to file their own divorces.

Boven, who has a client who can't afford to divorce because her health insurance would cost $750 a month, said many clients can't afford to pay her after the initial retainer runs out. That puts Boven in a difficult position of having to work for the client for free or ``desert'' the client right in the middle of a case. ``It's very tough,'' she said.

Boven does not take credit cards, but many divorce lawyers are starting to as a way to boost business and offer clients a financial alternative.

OFFERING HELP

Fort Lauderdale divorce attorney Iris Bass is part of a consortium of lawyers who are trying to make divorce less contentious and cheaper. Called Collaborative Family Partnership, the lawyers meet with clients alongside mental health and financial professionals to try to resolve the divorce quickly and without going to court. Often, the divorce can be finalized in two to three sessions of two hours each, Bass said.

Bass called this summer the worst she has seen for divorces. But she said she has started to see business pick up in the last six weeks. ``Maybe people just can't stand it any more,'' she said.