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No Mo? DOMA? Don?t Know! Can Same Sex Couples File Bankruptcy? Go for it.

By Andy Miofsky, Illinois Bankruptcy Attorney

The Defense of Marriage Act [DOMA] , 1 U.S.C. 7, defines the word spouse in federal law to only include a person of the opposite sex.  DOMA has been cited to preclude same sex married couples or couples joined by same sex civil unions from jointly filing bankruptcy.  A February 23, 2011 order from President Barack Obama prevents the Justice Department from enforcing this law and now clouds the issue.  Same sex couples might now be permitted to file bankruptcy.  At least they should try.

The Justice Department of the United States of America, which oversees federal bankruptcy cases through its U.S. Trustee Program, vigorously defends DOMA against same sex couples filing bankruptcy and against constitutionality arguments.  Or at least it did until President Obama instructed the Justice Department to end that practice.

Laws regarding marriage are generally determined by states, however,  DOMA prevented federal recognition of state authorized same sex marriages.  Does this mean same sex couples can file bankruptcy?  No, not necessarily.  DOMA remains on the books and Courts are free to uphold and apply the restrictive definition of an opposite sex ‘spouse’ to existing cases.  Also nothing prohibits creditors from raising the issue.   The test or death of DOMA may soon occur as federal courts in three states, Connecticut, Massachusetts and New York, are considering the constitutionality of DOMA in various cases, now without opposition from the Justice Department.

With the US Department of Justice out of the way, will same sex couples enjoy unfettered access to courts or will a cottage industry of creditors spring up to defend DOMA for moral reasons?  Time will tell, but the time is now for same sex married couples, and those joined under state civil unions, to seek equal treatment under bankruptcy law.

See Same Sex Marriages and Bankruptcy: A Benefit for a contra discussion of the benefit of not filing jointly.

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Full post as published by Credit Law Network on February 23, 2011 (boomark / email).