Same Sex Marriages and Bankruptcy
By L. Jed Berliner, Springfield Bankruptcy Attorney on Jul 28, 2007 in Bankruptcy Cases of Interest, Bankruptcy Practice and Procedure, Benefits of Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Decisions of Interest, General Bankruptcy Information, Lawyer to Lawyer, Marriage and Debt, Massachusetts, Venue and Qualifications
Same sex married bankruptcy filers are treated differently from those of opposite sex. The federal Defense of Marriage Act from 1996 defines “marriage” and “spouse” to exclude same sex spouses. In Massachusetts and some other states, same sex spouses may file joint state tax returns but not joint federal tax returns. They also may not file joint bankruptcy petitions.
Same sex debtors must pay fees and costs for separate petitions, but there can be a valuable benefit. Unless separated, married spouses’ incomes are totalled together when tested against the median income for determining if a five year repayment plan might be required. Since same sex marriages are not federally recognized, the incomes are not totalled together. Only one same sex spouse’s contributions to the other’s household expenses (payment of the other’s car payments, for example) is considered income for median income testing. This makes it much easier for same sex debtors to be under median income and avoid a repayment plan.
In a Massachusetts case (citation omitted to protect privacy), the US Trustee office of the Department of Justice did not object to a same sex married couple filing a joint petition if they were of opposite sex at the time of marriage, before later surgical alteration.
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