A recent decision from Judge Thomas Donovan in the Central District of California could allow same-sex marriages to file a joint bankruptcy petition in Southern California. Same sex marriages had been prohibited from filing a joint bankruptcy petition under the assumption that the Defense of Marriage Act prohibited the filing of a joint bankruptcy case. The Defense of Marriage Act defined a spouse as a person of the opposite sex, and therefore did not include a person in a same sex marriage. Under federal bankruptcy laws this definition had been used to define who could file a joint bankruptcy petition. Recently there has been a move to dispute this definition and allow couples in same sex marriages the same rights that other marriages enjoy.
The decision in Balas, in the Central District of California could pave the way for same sex couples to file a joint bankruptcy case in Southern California. Under the Balas decision, Judge Donovan found that the Defense of Marriage Act was unconstitutional as violating the 5th amendment rights of same sex couples. The decision involved a same sex male couple who had filed for Chapter 13 bankruptcy protection. The trustee in the case moved to dismiss the case arguing that as a same sex marriage they were prohibited from filing a joint bankruptcy case under section 302 (a) of the bankruptcy code. Although the decision is not binding on other judges, the fact that 19 other judges in the Central District of California signed the decision, reflects a strong belief that same sex marriages should be afforded the same rights as other couples.
This is an important move toward removing discriminatory barriers that previously prevented gay marriages from attempting to resolve their financial hardships through a joint effort in bankruptcy. As in any other marriage, same sex marriages, have their finances, and assets so intermingled that it requires many times a joint resolution of their financial situation. Allowing a joint bankruptcy filing for same sex marriages will reduce the costs associated with filing two separate bankruptcy cases and will eliminate many of the issues presented when administering two separate cases that are clearly intermingled.
California bankruptcy attorneys can hopefully use the supporting argument to help ensure that same sex marriages are allowed the same equal treatment that couples of the opposite sex have received. More than likely this decision will pave the way for future decisions that become binding precedent for other courts to follow. The decisions on this issue will likely reach the Supreme Court who will have to rule on the issue of whether the Defense of Marriage is unconstitutional as applied in bankruptcy.