Same Sex Marriage and Bankruptcy Filing
Crossing State Borders with Bankruptcy Filings
“Allowed” verbiage is often used in reference to “allowing” same-sex marriage. But how often do you fight to be “allowed” to face consequences for offenses you haven’t committed? Joint filing for bankruptcy is hardly something one would rally to be “allowed” to do. Most spouses fearfully ask if they’ll be “forced” to jointly file in a bankruptcy, which is almost always the case in consumer bankruptcies. While same sex couples rally state by state for their “better or for worse” rights, they take along with it the responsibility of being forced to jointly file bankruptcy for a debt they didn’t personally accumulate.
However, same-sex couples face the complication of inter-state filing for bankruptcy. Gay or lesbian married couples are only recognized as married in the state they were married in: cannot file taxes as married in other states or even have a subsequent divorce recognized. So, if a couple married in Vermont or Iowa owns an extravagant home and car in Iowa or Vermont but files for bankruptcy in Texas, Kentucky, Alabama, or any other non-recognizing state, do they jointly file? The current Defense of Marriage Act rules that states that don’t have legal same-sex marriage don’t have to recognize it at all…for better or for worse.
Consider this fact: the minimum state residency requirement is usually 90 days, and the transferring of major property can occur 4 year before filing for Chapter 7 or Chapter 13 personal bankruptcy. A same sex couple could easily state an out of state home or car as “exempt assets” in a bankruptcy and put those items in their spouse’s name, even temporarily. Same sex couples are equally susceptible to abuse of marriage rights, such as moving out of state and failing to recognize alimony or child support in their state of marriage.
U.S. Bankruptcy Trustees are appointed by the U.S. Attorney General, and are administrated by and Executive Office of U.S. Trustees in D.C. They are a federal entity, yet their jurisdiction often collides with state laws in state-sensitive issues like this. At the crossroads of state and federal laws, 2009’s new proposed bill the Respect of Marriage Act which could clearly delineate a couple as married regardless of where they live after obtaining that marriage license. This would greatly clarify marital status inter-state tax filing, bankruptcy, and divorce.
For complicated bankruptcy questions answered, turn to the pros at Legal Helpers. Our attorneys are well versed in Bankruptcy Law and can help you obtain the debt restructuring and debt forgiveness bankruptcy plans you so desperately need. For a free initial debt consultation, call Legal Helpers at 1-800-260-1402
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