Saturday, June 25, 2011
In a landmark move, a bankruptcy court in the Central District of California upheld the right of a same-sex married couple to file a joint Chapter 13 bankruptcy petition. In this case, two men who legally married in California in 2008, Gene Balas and Carlos Morales, filed jointly for Chapter 13 bankruptcy relief. The U.S. Trustee moved to dismiss the case solely because petitioners are a same-sex married couple.
Although several other bankruptcy courts around the nation have allowed same-sex married couples to file joint bankruptcy petitions, this case is noteworthy in that 20 of the 24 bankruptcy judges in the Central District of California took it upon themselves to sign the opinion. The opinion addresses the federal Defense of Marriage Act (DOMA) which defines marriage as a union between a man and a woman. In its Memorandum of Decision, The court systematically scrutinizes DOMA, and concludes that it violates the equal protection rights of petitioners under the Fifth Amendment of the Constitution.
In this particular case, the couple had struggled with extended periods of unemployment along with numerous episodes of illness and hospitalizations. They sought to repay their debts under a Chapter 13 bankruptcy plan. If they had not been allowed to file jointly, each spouse would have had to file and follow a separate Chapter 13 repayment plan for the same household – a course that can be confusing and difficult. To be sure, there can be advantages to filing separate bankruptcies. But this couple chose the path that worked best for them, and the bankruptcy court agreed that to deny them this choice would violate their right to equal protection.
Whether this decision will be appealed is not yet known. And whether California bankruptcy courts in other districts will follow suit and permit same-sex married couples to file joint bankruptcy petitions is also up in the air. Stay tuned.