Same-Sex Marriage and Bankruptcy

08 May Same-Sex Marriage and Bankruptcy

Supreme Court

With the Supreme Court’s hearing two major cases addressing same-sex marriagethis term,Hollingsworth v. PerryandUnited States v. Windsor,we have been getting questions about how same-sex marriages are dealt with in bankruptcy. The answer is, “it depends.”

The first issue is the federal Defense of Marriage Act (“DOMA”). Sections 2 and 3 of DOMA are relevant here, and state:

Section 2. Powers reserved to the states
No State, territory, or possession of the United States, or Indian tribe, shall be required to give effect to any public act, record, or judicial proceeding of any other State, territory, possession, or tribe respecting a relationship between persons of the same sex that is treated as a marriage under the laws of such other State, territory, possession, or tribe, or a right or claim arising from such relationship.
Section 3. Definition of marriage
In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.

Section 3 currentlyprohibits same-sex married couples from filing a joint bankruptcy petition. Although the Obama administration decided in February of 2011 that DOMA was unconstitutional, and directed that it not be defended in Court, whether a same-sex married couple can file a joint petition can still depend on where the couple lives. Section 2 of DOMA would allow a state such as Virginia, which prohibits same-sex marriage and does not recognize as valid a same-sex marriage from another state, from recognizing a marriage that would be valid in the District of Columbia. Since there is no federal law of marriage, federal courts–including the Bankruptcy Court–will look to state law to determine whether a couple is married, and thus able to file a joint bankruptcy petition. If the couple were not validly considered married under state law, they would not be considered married for the purposes of filing a joint bankruptcy petition. In Maryland, where I practice, same-sex marriage is legal, and a joint bankruptcy petition can (and has) been accepted by the Court on behalf of a married same-sex couple.

If DOMA is overturned in a narrowly-written ruling that covers only Section 3 (Section 2 not being directly at issue), the above-described prohibition against a joint petition in states that do not recognize same-sex marriage could still be allowed. If, however, a broad decision is entered prohibiting discrimination against someone on the basis of their sexual preference, laws and constitutional provisions such as those in Virginia would be stricken, and same-sex married couples across the country could file a joint bankruptcy petition.

by , Maryland bankruptcy lawyer

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Brett Weiss, a senior partner at Chung & Press, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his law partner, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute, the Bankruptcy Bar Association of Maryland, and the Civil Justice Network. He has been recognized as a “Super Lawyer” every year since 2007 for Maryland and the District of Columbia, and in 2011 received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, The United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.
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