For Richer or Poorer: Same-Sex Married Couples May Now File Joint Bankruptcies

In a landmark decision, the United States Supreme Court held in U.S. v. Windsor, that the Defense of Marriage Act or DOMA as it is commonly referred to, is unconstitutional under the Equal Protection Clause of the United States Constitution. Under the Defense of Marriage Act, marriage was defined for all federal purposes as the union between a man and a woman. What that meant was that under federal law, same-sex marriage was not recognized as a legitimate marriage. The impact of this definition was that thousands of same-sex couples, who were legally married in a State that allowed same-sex marriage, were still being denied certain federal benefits of marriage. Some of these benefits included how an inheritance between a same-sex couple is treated for tax purposes; the denial of health benefits to the same-sex spouses of federal employee’s; the denial of military benefits to the same-sex spouses of military personnel, social security benefits for surviving same-sex spouses, and federal income tax laws.

In addition, one often overlooked “benefit” was the ability for a same-sex married couple to file a joint bankruptcy petition. In States that allowed same-sex marriage, the same-sex couple still could not file a joint bankruptcy petition together because bankruptcy is federal law, and until today, DOMA was the law. This meant that same-sex couples who shared bank accounts and credit cards would have to file two separate bankruptcy cases to eliminate their shared debt.

This inability to file a joint petition often was a financial burden on the couple as they had to come up with two sets of filing fees and two sets of attorney fees. In an already cash-strapped household, this often was too difficult and so the couple was denied the ability to receive debt relief through bankruptcy.

The U.S. vs. Windsor case has now changed that. Writing for the majority of the Court, Justice Kennedy stated that DOMA sought to injure the very class of people the State of New York had sought to protect. This desire to exclude same-sex couples from recognized legal status as married people violated the due process and equal protection clauses of the Constitution. Kennedy goes on to say, the Constitution’s guarantee of equality “must at the very least mean that a bare congressional desire to harm a politically unpopular group” cannot justify disparate treatment of that group. With the striking down of DOMA, same-sex married couples may now receive federal benefits. In addition they may now make the often difficult decision to file bankruptcy together without having to pay separate filing fees and attorney costs.

If you need to file bankruptcy and have questions about whether you should file with your spouse, contact an experienced bankruptcy attorney for advice.

The Law Offices of Melanie Tavare is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code