Same Sex Bankruptcy Sacramento

You might have recently heard that the United States Supreme Court recently ruled that states may not prohibit same sex couples from marrying. Along with a decision a few years ago striking down the Defense of Marriage Act (DOMA), these two decisions have an important impact on bankruptcy law as it relates to same sex couples. Who would have thought that same-sex marriage & bankruptcy would be connected?

Marriage offers multiple financial benefits when it comes to retirement, taxes, and social security. However, bad credit and debt can easily strain any relationship and wreck havoc on a marriage. Additionally, under California community property law, debts obtained during marriage belong to both spouses, even if only one spouse officially applied for the debt.

In the past, the federal government did not recognize same-sex marriages, so couples could not file joint federal tax returns or bankruptcy cases. However, this changed two years ago when the US Supreme Court ruled on United States v. Windsor. This case effectively struck down the federal DOMA. This decision cleared the way for same-sex married couples to enjoy the same federal benefits as other married couples – including the right to file joint bankruptcy petitions.

There are several benefits that couples could miss out on by not jointly declaring bankruptcy together. By filing a joint petition, couples can efficiently list all there debts together, whether those debts are in both names or not. It is also less expensive to file together. Attorneys generally charge less for one married petition than for two individual, not to mention the court costs. Couples can also take the credit counseling classes together. They will then also receive their joint discharge at the same time, making the entire process easier for everyone.

The bottom line is that same sex couples may file joint bankruptcy petitions as long as they are legally married.