Same-sex marriage is a hot-button issue, dividing the nation as to whether marriage can be only between a man and a woman. When looking at bankruptcy, the question of whether same-sex married couples can file together can be thorny as well.
Under the Section 302(a) of the U.S. Bankruptcy Code, a joint bankruptcy case may be filed by an individual and that individual’s legal spouse.
What, then, of same-sex married couples who look to file for bankruptcy together?
Where Can Same-Sex Couples Get Married?
California allowed same sex couples to get married between June 16, 2008 and November 5, 2008. Though the United States Court of Appeals for the Ninth Circuit struck a subsequent ban on same-sex marriages on February 7, 2012, California has yet to pass a new law allowing these unions. In spite of that fact, all California same-same marriages granted by any civil entity, foreign or otherwise, anytime before the passage of Proposition 8 remain legally recognized and retain full state-level marriage rights.
The Federal Government’s Stance On Same-Sex Marriage
The Defense of Marriage Act, passed on September 21, 1996, defines the term “spouse” for the purpose of applying federal law, as “a person of the opposite sex who is a husband or a wife.” In spite of the fact that the federal government announced that it would not defend DOMA in court anymore, the law has not been repealed.
The bankruptcy courts, which apply federal law, would be governed by DOMA rather than state laws.
California Bankruptcy Court To The Rescue
In the case of In re Balas and Morales, two men married under the laws of the State of California filed a joint Chapter 13 bankruptcy case in 2011. Facing dismissal of their case by the U.S. Trustee, the court was forced to determine whether Section 302(a) of the U.S. Bankruptcy Code could allow Mr. Balas and Mr. Morales to file for bankruptcy together.
The U.S. Bankruptcy Court in Los Angeles held that DOMA violated the equal protection rights afforded under the Fifth Amendment of the United States Constitution, and allowed the case to go forward.
Will Your Court Allow Same-Sex Married Couples To File Bankruptcy Together?
Although the Justice Department is no longer defending DOMA, until it is repealed it is bound to enforce it, which is why you should be aware that your local US Trustee’s Office may challenge your joint bankruptcy petition if you decide to file with a same-sex spouse.
The bankruptcy judges in the U.S. Bankruptcy Court for the Central District of California are a pretty safe bet, and some lawyers in New York City have gotten through a case without incident (my firm has not, as of now, filed such a case). Anywhere else, all bets remain off for the time being.
Image credit: SFBart (note that the men pictured are not the debtors in the Balas and Morales case.)