As discussed in a separate post, at this moment, same sex couples are advised not to file joint bankruptcy petitions. However a decision in a recent case has added a bit of momentum to what could be a change on the horizon.
In re Gene Balas and Carlos Morales, nearly the entire Bankruptcy Court for the Central District of California (20 of the 24 judges) held that the Defense of Marriage Act (“DOMA”) is unconstitutional to the extent it prevents same-sex couples who are legally married under state law from filing joint bankruptcy petitions. Currently, Connecticut, Iowa, Massachusetts, New Hampshire, and Vermont have legalized same sex marriage. And some couples in California, including Balas and Morales, were married during the very short time that same sex marriage was allowed there.
While the decision is not binding on bankruptcy courts in other districts, including Massachusetts, the decision appears to be another step in the dismantling of DOMA, to the extent it prevents gay and lesbian couples from filing jointly.
While this decision appears to be good news for same sex couples, some bankruptcy practitioners have suggested that removing the bar to same sex joint petitions for bankruptcy could actually take away an advantage currently enjoyed by same sex couples. These attorneys point out that, currently, any couple that lives together but is not legally married, including heterosexual couples, are not required to include all income of both partners in calculating the means test. However, that point seems trivial when compared to the greater issue of whether same sex couples should be allowed to marry and, thereafter, make their own determinations regarding the choice of joint vs. individual bankruptcy filings.