Can Same Sex Couples File Bankruptcy?

Same Sex Couples and Bankruptcy

In a recent bankruptcy decision in the state of California, a bankruptcy judge ruled that it would not bar same-sex couples from filing bankruptcy. The bankruptcy case involves a same-sex couple who were legally married in California who wanted to file bankruptcy jointly. The bankruptcy trustee moved to dismiss their bankruptcy petition citing the Defense of Marriage Act; but he was overruled by the bankruptcy judge.

“In this court’s judgment, no legally married couple should be entitled to fewer bankruptcy rights than any other legally married couple,” wrote Judge Thomas B. Donovan of the United States Bankruptcy Court for the Central District of California. In an unusual move, 19 other judges – nearly all of the 24 judges of the central district – also signed the decision.

However, in Texas, same-sex marriage is banned by the constitution and same-sex unions are not recognized in bankruptcy court or any other court in the state. While same-sex couples can file bankruptcy separately, they cannot file bankruptcy jointly as a married couple would. Even if a same-sex couple was legally married in another state, they would be unable to file bankruptcy as a married couple in the state of Texas because the state does not recognize same-sex unions of any kind. Same-sex couples seeking to file bankruptcy need to speak with their bankruptcy attorney about some of the disadvantages they may face and what strategies they can take to overcome those obstacles.

While there are some drawbacks to being forced to file bankruptcy separately, working closely with your bankruptcy attorney, you should be able to effectively protect the most important assets in your household.

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