SAME-SEX COUPLES CAN NOW FILE JOINT BANKRUPTCIES

Married couples can file a joint petition in bankruptcy for a single filing fee. Consolidation of cases for married couples saves administrative cost, attorney fees, and can promote domestic harmony. This benefit has, until recently, been denied by some courts for same sex married couples or couples with civil unions. The United States Department of Justice has announced that it would stop opposing same-sex bankruptcies if the couple is legally married. It is a branch of the Justice Department called the “US Trustee” that represents the administrative branch of government in all bankruptcy cases.

This change of policy comes as same-sex bankruptcies have been gaining traction in some districts. It can be seen as another indication the Obama administration will no longer defend the Defense of Marriage Act (DOMA). But what does that mean for same-sex couples looking to petition for bankruptcy jointly? A pre-DOMA bankruptcy case may be telling. In 1995, the Northern District of Georgia decided In re Allen, 186 B.R. 769. The Court in Allen sided against the same-sex couple on the grounds that they were trying to set a federal standard for “spouse” when Congress hadn’t intended there to be a federal standard, so the state definition is what controlled. In fact, the Court goes so far as to say “…if a state recognizes a legal marriage between a same sex couple, they would qualify for relief under § 302” of the Code.

With the Federal government no longer objecting, it appears as though married and civil union same-sex couples should be able to file for bankruptcy jointly in states that have allowed same-sex marriage or civil unions. Under the Full Faith and Credit Clause of the Constitution, the same is likely true even in states that do not allow same sex marriage. The future of DOMA, however, is less certain. A spokesman for Speaker of the House John Boehner (R-Ohio) stated that “bankruptcy cases are unlikely to provide the path to the Supreme Court, where we imagine the question of constitutionality will ultimately be decided.”

DOMA isn’t dead yet. It has many ardent supporters in positions of power. Others, equally ardent in their opposition, are attempting to overturn the law in Congress. While the law may one day be repealed or ruled as unconstitutional by the Supreme Court, it remains the law; albeit one that the current administration has chosen not to enforce. The opponents of same-sex marriage do not believe that bankruptcy court is an appropriate place to save DOMA. For now, file away, same-sex couples.