The Devastating Economics of Divorce

April 16 -- Lisa Bell knows the financial struggle of divorce all too well.

Bell, a 35-year-old public relations consultant in Boulder, Colo., decided to sell her half of the three-year old public relations firm she had started so that she could stay home to take care of her 4-year-old son and devote more time to her struggling marriage.

Unfortunately, her sacrifice was in vain. Three months after selling out to her business partner, she and her husband decided to divorce. Even though they divided their assets equally, Bell has had to start all over in her career, working from home as an independent consultant.

She now earns half of what she used to make in her old business, and has had to get used to living on a quarter of the income she enjoyed while she was married. She's also living with her son in the couple's old house, which she has been trying to sell since July.

"It's become an albatross now," Bell says of her home. "It's a house filled with adult toys that are a representation of all of the money we accumulated in the marriage. It's full of stuff that I can't sell and I don't want anymore."

Harsh Reality for Some

When divorce hits the headlines it's usually those of the rich and powerful — like the recent splits of Jack Welch of General Electric or Sen. Jon Corzine of New Jersey — prompting court watchers to scrutinize how these by power brokers and their ex-wives divvy up their fortunes.

But for people like Lisa Bell, mere mortals who don't have millions at their disposal, divorce can be the one of the most financially devastating events they will ever face.

This is especially true for women, who are more likely than men to find themselves with financial difficulties after getting separated or divorced. According to the latest U.S. Census figures, 21 percent of recently divorced women were living below the poverty line, compared to only 9 percent of recently divorced men.

How marital property gets distributed during a divorce differs from state to state. Most adhere to what is called an equitable distribution system, where a court divvys up the marital estate based on a number of factors, such a person's need or earning power.