When Tim was 25, he was imprisoned for 28 months in Minnesota's Federal Correctional Institution after being arrested for possession of 1.43lb of cocaine. He was released in 1981 after he agreed to reveal the names of his accomplices. In regards to this incident, he said jokingly, "Don’t ever sell drugs to policemen. They don’t like it. They tend to tell judges. People come get you and you then you eat very bad food for a long time."
Tim was a struggling stand-up comedian around this time and was married to his first wife, Laura Diebel. They married on April 7, 1984, and Diebel had stayed by his side during his difficult time. However, after Home Improvement propelled Tim to national fame in the 90s, his relationship with his wife started degrading.
Tim's drinking problem led to a DUI arrest in 1997 and a mandatory rehab stay. Tim and Laura decided to legally separate in 1999. In an interview with The Detroit News a year before, Tim had admitted that he had "let (his) family slide" in pursuit of fame. They divorced in 2003 and three years later, he married his current wife Jane Hajduk.