Same-Sex Married Couples and Bankruptcy: Can You File a Joint Petition?

If you are legally married to your same-sex partner (that is, you married in a state, country, or province that recognizes same-sex marriage), can you file a joint bankruptcy petition? Until recently, the answer was no. But today, in some jurisdictions you can file a joint petition with your same-sex spouse.  

Joint Bankruptcy Petitions

Bankruptcy law allows married couples to file one bankruptcy petition together – called a joint bankruptcy petition. For most couples, filing a joint bankruptcy is more advantageous than filing an individual bankruptcy, but not always. (To learn more about joint bankruptcy and its pros and cons, see our Filing Considerations for Married Couples area.) 

Special Issues for Same-Sex Married Couples

Although many of the pros and cons of filing a joint petition for different-sex married couples apply to same-sex married couples, keep in mind that some issues that arise in bankruptcy may be different. For example, federal law treats the income of same-sex married couples as that of “roommates” – which means you could file an individual Chapter 7 bankruptcy and not have to count your spouse’s income for purposes of the means test. This could be advantage if your spouse’s income would cause you to fail the means test. (To learn more about the means test, see our Means Test and Other Chapter 7 Eligibility Issues area.)

Same-Sex Couples and Joint Bankruptcy

Although the bankruptcy code never defines a married couple as two spouses of different genders, until recently, bankruptcy courts would not allow same-sex married couples to file joint bankruptcy petitions. This was in large part because of the federal Defense of Marriage Act or DOMA (1 U.S.C. § 7 and 28 U.S.C. § 1738C) which states that the federal government does not recognize same-sex marriage and that states may disregard such marriages performed in other states.

Recently, however, some bankruptcy courts have allowed same-sex married couples to file joint bankruptcy petitions. For example, in one case, a same-sex couple that legally married in California in 2008 filed a joint Chapter 13 bankruptcy petition. The U.S. Trustee initially opposed the petition on the grounds that the couple was not “married” under federal law. In June 2011, the bankruptcy court (in an opinion, signed by 20 of the 24 bankruptcy judges in the Central District of California), ruled that the couple could pursue the joint Chapter 13 bankruptcy. (In re: Balas and Morales, 449 B.R. 567 (C.D.Cal. 2011).)  In rendering its opinion, the court declared that DOMA was unconstitutional.

Several weeks later, on July 6, 2011, the U.S. Department of Justice stated that it would no longer oppose joint bankruptcy petitions filed by same-sex married couples. In theory, this would mean that the U.S. Trustee for the different bankruptcy jurisdictions would not oppose such petitions. What happens in practice, however, still remains to be seen.

The Evolving Law: Consult With a Local Bankruptcy Attorney

Despite the Justice Department’s announcement and several courts’ allowance of joint petitions filed by same-sex married couples, it’s still not clear how different courts and districts will treat joint petitions filed by same-sex married couples. Some U.S. Trustee’s may continue to oppose such petitions, and there’s nothing preventing creditors from raising an objection as well.