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Chapter 13 in 13 Chapters
[by William J. McLeod] is the essential reference guide that chapter 13 attorneys should have at their fingertips to assist in their practice and to share with clients to help explain the bankruptcy process.
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The Elephant in the Room: Married Same-Sex Debtors
The decision to seek bankruptcy protection is never easy, and when two people are involved, it is not necessarily easier. Married opposite-sex debtors have the option of seeking bankruptcy protection jointly in one case. But as a growing handful of states recognize same-sex marriages or its legal equivalent (“unions”), and as the legitimacy and constitutionality of the Defense of Marriage Act (or DOMA) continues to be litigated in courts across the country, same-sex debtors seeking bankruptcy relief face even tougher decisions.
Married opposite-sex debtors can file cases jointly. It’s one case, one trustee (in Chapters 7 and 13) and one filing fee. The debts need not be joint, only the debtors. Debtors can bring in their joint debts and debts they hold only in their name. Also, to be a joint case, the debtors must be legally married. And they must be a man and a woman.
It is a generally accepted proposition that DOMA would preclude the filing of a joint bankruptcy petition filed by a same sex married couple. I’m unaware of any bankruptcy decision that has allowed it. Same-sex couples are faced with two options: file two bankruptcy cases, or fight for the right to seek bankruptcy relief as a married same-sex couple. While the second option is undoubtedly noble and a worth a good fight, the reality is that this course is not necessarily consistent with the goals of the overwhelming majority of bankruptcy debtors who need relief from their debt: they are not looking to prove a point; they are hoping to get on with their lives.
A married same-sex couple will be pulling together all their required financial information, and counsel will be working with them to ensure that it is complete and their disclosures accurate. And counsel will also need to research and prepare in anticipation of motions attacking the joint filing. Perhaps a motion to dismiss, or a motion to bifurcate (split the one case into two). Regardless of whichever party-in-interest files it (and the Bankruptcy Code and case law defines who is a “party in interest”), it’s unlikely that the filing itself will not go unchallenged – and that’s before anyone gets into such issues as income, assets, liabilities, and other issues.
Counsel may have arguments that are rooted in the Bankruptcy Code, but ultimately, constitutional arguments will need to be briefed and raised. Some of those constitutional arguments may involve doctrines and phrases that I honestly have not read up on since law school. Expect the decision – whatever it is – to be appealed, perhaps more than once. Perhaps to a US District Court, a Bankruptcy Appellate Panel, a Circuit Court of Appeals, or maybe even the Supreme Court of the United States. If you’re the debtors, expect all of this legal maneuvering to add time, cost and stress to what I have no doubt is an already stressful situation.
So if you’re a married same-sex couple facing the need to file bankruptcy, what do you do? It’s a tough decision. You can file two cases which may or may not present its own complications, but ultimately, it reminds you that for now, the law looks upon your relationship as second class. Or you can file one joint case, dig your heels in and fight for the right to file a joint petition. Yet ultimately, married debtors seek bankruptcy protection because of their financial difficulties, not because they have some interest in fighting for equal rights. By the time they have made their decision to file, their concerns are not about fundamental rights. Rather, their concerns are more towards keeping their family safe, sane and financially sound.
Is it fair that married same-sex couples cannot seek bankruptcy protection with the same ease and rights as an married opposite-sex couple? Hell no. But this is the current state of the law. Changing it will either take an act of Congress or a very brave, very committed and very patient married same-sex couple (or two) who find themselves drowning in debt and who – in spite of those debt burdens is also up for fighting that good fight.
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Tags: Commentary - Legal, Consumer Rights, Defense of Marriage Act (DOMA), Joint Debtors
This entry was posted on Monday, September 21st, 2009 at 2:57 pm and is filed under Bankruptcy, Chapter 11, Chapter 13, Chapter 7, Consumer Rights. You can follow any responses to this entry through the RSS 2.0 comment feed.
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