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thirty and counting

Divorce in your 30s takes heaps of resilience to cut through the darkness. So let's first shine a ray of positivity.

"At 35," said Halifax-based financial planner and divorce mediator Angela Mercier, "I believe there's a silver lining. You still have another chance to find somebody else. You have a chance to start earning more money. You have a chance to rebuild your life in a way that you want it."

But in financial terms, divorce at this age can come at "the worst time of their life," she added. Of course divorce at any age is financially fraught. In one's 40s or 50s, it can cut into retirement savings and the ability to pay children's tuitions. In one's 60s or older, it can cripple retirement spending.

Yet unlike older divorcing couples who may be splitting up assets such as a pension or a paid-for family home, a defunct couple in their 30s likely has more debt than assets. Buying out the partner's share of a house or condo, or finding a new home altogether, in addition to living on dramatically less income, can be debilitating, even to the point of bankruptcy.

"Yeah, it's going to be huge," Ms. Mercier said of the negative financial consequences for some. "Let's say that neither of them can afford the mortgage on the house when they split. So, then they have to try to sell that house.

"Or let's say somebody leaves, and the other is trying to make the mortgage payments, and yet there is a whole bunch of credit-card debt. And the banks, in my opinion, do not give personal loans any more. What they try to do is give you lines of credit," she said.

Complicating matters in these scenarios, couples in their 30s are often new parents growing a household together, at a stage where one or both are still making financial sacrifices toward larger household goals.

One may have helped to support the other who was getting an advanced degree, only to see the marriage fall apart when the degree finished and they were expected to start paying off that schooling. Or one spouse may have taken herself or himself out of the work force entirely to raise a young child and now has to juggle working part time and parenting part time after divorce.

Laws governing the division of financial assets don't get into the fairness or unfairness of a separation. Instead, the concept is to see all assets and debts as a pie to be split equally. Not every asset has to be equally split, but rather it's that the entire pie of debt and assets must be divided. So, a couple may decide to let one ex-partner keep the home, while the other takes the investments.

Yet, the common burden for a couple in their 30s of heavy loans or credit-card debt can be severely disabling.

"That's when people's credit goes in the toilet, because if they split up, and all they have is debt, and someone can't even make the minimum payment, then I see them saying, 'I haven't made a payment on my credit card in three months.' Their credit score has now been affected," Ms. Mercier said.

Every couple's situation is different, but her underlying point in these examples is that a divorcing couple's financial situation can spiral downward unless both sides know their legal rights and obligations and they have thought through the best way to disentangle those assets and debts, mostly likely by seeking professional help.

Rights and obligations for splitting assets and debt differ province by province. Under Ontario rules, "the division of property is based on the difference in the growth of these assets over the period of time they were married," said financial divorce specialist Eva Sachs in Toronto.

"So, with younger clients, let's say they're 31 or 30, they may have had some RSP [retirement savings plan] assets that they brought into the marriage. They can deduct those [in other words, the premarriage value of the assets doesn't have to be split]. It's only the difference in the growth of those assets, or the growth in debts over the period of time that they were married," Ms. Sachs said, speaking of Ontario.

The matrimonial home is the exception. With that, the total value of the home is split in Ontario, she noted.

In British Columbia, changes in legislation acknowledges people often enter marriages already separately owning major assets — including a condo or house. But life is complicated. What if a spouse helped pay for the other's home?

"Then one can argue that a gift occurred, and therefore, the presumption of a 50-50 division should apply to the entire worth of the asset, not just the accruing value since the commencement of co-habitation," said Jean-Luc Forest, a family lawyer in Vancouver. The law is still defining itself in the courts.

Ultimately, he noted, a conceptual shift in the legislation "that strongly encourages everyone to resolve their issues through a dispute resolution process. Don't just go to court. Don't just hide behind the shadow of the lawyer and throw mud at each other. Step up, invest in your own issues, and you may find that you'll resolve these issues in a way that you can move on with your life productively," he said.

Others, too, note this movement toward more collaborative resolutions. And some feel that people in their 30s are already better versed in financial matters than older generations were in their 30s. They see 30-year-olds increasingly looking at more pragmatic, less destructive solutions. That could especially mean addressing debt.

"I see a number of clients where they're contemplating divorce, and they're coming to see me as a financial planner and saying, 'Is there anything I can be doing to help prepare for the financial implications of doing this?'" Ms. Sachs in Toronto said.

One silver lining is that people in their 30s still have a lifetime of earning ahead of them. In a collaborative settlement process, departing partners could help each other choose what kind of division of debts and assets best helps each as individuals going forward.

"I think the most important part of the divorce process is choosing the divorce process," said Jennifer Weeks, a divorce financial specialist in Vancouver, "choosing whether you're going to do mediation, collaboration or litigation."

Mediation often involves hiring a certified mediator as a neutral third-party to facilitate discussions.  Collaboration means bringing both sides to the table with professional and legal help to come to a joint agreement. Litigation is the more adversarial process. There's also the kitchen-table method, with the couple divvying things on their own and simply getting individual legal help to draft the final separation agreement.

No matter how amicable though, the end of a marriage inevitably means starting again to some degree financially. "It's expensive to get divorced. Your life's not going to look the same," Ms. Weeks said.

Canadian population by marital status and sex

Number of persons who are single, married, separated, living common law, widowed, or divorced

# of persons,
Both sexes36,286,425
Both sexes14,357,875
Both sexes14,033,959
Both sexes832,245
Living common law
Both sexes3,327,768
Both sexes1,834,746
Both sexes1,899,832

Credit: Statistics Canada

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