As a bankruptcy attorney in Arizona and (sometimes) avid blogger, many interesting questions are sent my way. A fairly common topic involves the filing of a joint bankruptcy petition. Can a friend and I file a joint petition? Can an enemy and I file a joint petition? Can my grandma Ruth and I file a joint petition?
A more serious subset of this question addresses whether couples in a same-sex marriage should be allowed to file a joint bankruptcy petition. In recent years, bankruptcy attorneys have watched this topic play out in the California bankruptcy court.
There are good reasons to file a joint bankruptcy petition. For one, it is generally cheaper to file a single petition. The largest cost of filing for bankruptcy protection is likely the cost of an attorney, and filing a single petition in cheaper than two. Filing for bankruptcy also involves a single 341 hearing.
The opportunity to file a joint petition is especially important when dealing with chapter 13 cases. Remember that chapter 13 bankruptcy involves the partial repayment of your debts, over a 3-5 year period. For a same-sex couple filing separate petitions, this means two separate repayment plants to coordinate within a single household.
Gene Douglas Balas and Carlos Morales were legally married in 2008 under California state law recognizing same-sex marriage. (**For those wondering whether the 2010 controversy surrounding Proposition 8 affects the legal standing of this marriage, see below.) Subsequently, they filed a joint petition under chapter 13 of the bankruptcy code.
The U.S. trustee assigned to their case objected to the filing of a joint petition based on federal definition of marriage contained within Section 3 of the Defense of Marriage Act. In response, 20 of 24 bankruptcy judges in the Central District of California signed an opinion which concluded that the defense of marriage act violates equal protection rights of petitioners under the Fifth Amendment of the Constitution.
Without getting into too much detail, a legal tennis matched ensued. First, the U.S trustee filed an objection to the opinion of the district court. Following consultation with the House Bipartisan Legal Advisory Group (BLAG), the U.S. Trustee asked to withdraw its appeal in its challenge to above-referenced petition. The following statement was released:
It is important to note that Arizona doesn’t currently recognize same-sax marriages. While a 2006 amendment defining marriage as between a man and a woman failed, a similar statute was ultimately passed in 2008.
** The California Supreme Court ruled on May 15, 2008, that same-sex couples have the right to marry in California. Proposition 8, which amended the California Constitution to define marriage as between one man and one woman, was passed on Nov. 4, 2008. On Aug. 4, 2010, a federal district judge ruled that the same-sex marriage ban in Proposition 8 violated the equal protection provisions of the U.S. Constitution. Enforcement of that decision has been stayed pending appeal. California does not currently allow same-sex marriages to be performed. Same-sex marriages performed before Proposition 8 was passed remain valid.