By Ryan C. Wood
{Since the writing of this article it is legal for same sex couples to be married under California law. Joint petitions for bankruptcy can be filed in a California Bankruptcy} This issue is of course a politically charged issue that this article will not address. This article merely discusses what is possible given current bankruptcy law and court decisions. This article does not attempt to address what is right or what is wrong regarding same sex marriage.
In In re Balas and Morales, 449 B.R. 567 (Bkrtcy C.D.CA June 2011) the court held that two men legally married under California law could file a joint petition for bankruptcy protection under Chapter 13 of the bankruptcy code. U.S. Bankruptcy Judge Honorable Thomas Donovan wrote this opinion and all 19 of the Central District of California judges signed the opinion as well.
The debtors’ were legally married under California law in 2008, prior to Proposition 8 being passed by California voters. So under California law the debtors’ were/are legally married. When the debtors’ bankruptcy attorney filed their Chapter 13 case as a joint case the United States Trustee filed a motion to dismiss the case for cause. The United States Trustee cited the Defense of Marriage Act which says for purposes of federal law the definition of a spouse is a person of the opposite sex who is a husband and wife.
Judge Donovan held that section 302(a) of the Bankruptcy Code and the Defense of Marriage Act do not bar a same sex couple from filing a joint bankruptcy petition. The court wrote that no legally married couple should be entitled to fewer bankruptcy rights than any other married couple. Judge Donovan even went so far as to hold that the Defense of Marriage Act violates their equal protection rights afforded under the 5th Amendment of the United States Constitution. Judge Donavan further held that there was no valid, defensible governmental interest advanced by dismissing the debtors’ joint bankruptcy petition.
Just taking this from a bankruptcy attorney perspective there could be an advantage of filing a joint petition for a same sex couple and there are advantages of filing a same sex couple as individual cases. The obvious detriment to a same sex couple is that they will both have to pay the filing fee and mandatory course fees twice. Most bankruptcy lawyers will charge their full fee for both cases too.
The United States Supreme Court is supposed to rule on California’s Proposition 8 this week, so their ruling may change the law as it exists in California.
