New York only recently allowed same-sex couples to marry, but that doesn’t mean they receive equal treatment under federal law. This distinction appears acutely in situations surrounding the federal tax code, Social Security survivor benefits, and bankruptcy. The cause is the Defense of Marriage Act (DOMA), passed in 1996, which defined the term, “marriage,” as a union between two people of opposite sexes. In particular, same-sex couples cannot file bankruptcy jointly, which might be advantageous to them. In the last two years, though, the Justice Department has ceased enforcing DOMA and federal courts have held it unconstitutional because it violates the Equal Protection Clause in the U.S. Constitution.
For instance, in a New York case back in May 2011 (In re: Somers) , a same-sex couple obtained a marriage license in Vermont, and filed bankruptcy in New York. The U.S. Trustee filed to dismiss their case, citing DOMA. The judge in that case sided with the debtors because forcing them to sever their case would only make the bankruptcy process more expensive for all parties. The judge did not find DOMA unconstitutional, but a month later, a bankruptcy judge in the Central District of California did. Interestingly, 20 of the 24 judges in the Central District signed the opinion. More recently, in May 2012, the First Circuit Court of Appeals held DOMA unconstitutional as well, but it stayed enforcement of its decision until the government could appeal the case to the Supreme Court.
These cases occurred outside of New York. California is in the Ninth Circuit, and the First Circuit encompasses mostly states in New England. New York itself is in the Second Circuit, so these decisions do not affect debtors in this state. However, given that the Justice Department won’t appeal any cases, it’s unlikely that same-sex marriage will hinder a bankruptcy filing.
For more questions about same-sex couples in bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney Brooklyn NY Bruce Weiner for a free initial consultation.
