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Bankruptcy Court Permits Gay Married Couple to File Joint Bankruptcy Case

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You may remember that last month a court in Los Angeles declared the Defense of Marriage Act (“DOMA”) unconstitutional. What was interesting was that this was a bankruptcy ruling. The federal bankruptcy court in Los Angeles, the busiest one in the country, found the DOMA unconstitutional for purposes of determining who may file a joint bankruptcy case:

In this court’s judgment, no legally married couple should be entitled to fewer bankruptcy rights than any other legally married couple.…[T]he court finds that DOMA violates the equal protection rights of the Debtors as recognized under the due process clause of the Fifth Amendment.

The background: Gene Douglas Balas and Carlos A. Morales were married in 2008 during the short window of time when gay marriages were legal in California. The Bankruptcy Code allows a “joint case” to be filed by “an individual . . . and such individual’s spouse.” DOMA defines the term “spouse” for the purpose of applying federal law, as “a person of the opposite sex who is a husband or a wife.” The issue was whether that restriction violated this married couple’s equal protection rights.

To decide this issue, the court asked “whether dismissing the Debtors’ bankruptcy case pursuant to DOMA ‘advances an important governmental interest.’” It listed the following possible governmental interests, along with the reasons it believed that either dismissing the joint filed case or making the debtors file two separate individual ones would not advance any of them:

  • Encouraging responsible procreating and child-bearing (the Debtors have no children, and even if they did, there is no basis in the evidence or authorities to conclude that Debtors’ joint bankruptcy filing would affect Debtors’ children (if any, later) differently from children in other “traditional” joint bankruptcy cases);
  • Defending or nurturing the institution of traditional heterosexual marriage (the Debtors are already married to each other, and allowing them to proceed jointly in this bankruptcy case cannot have the slightest cognizable effect on anyone else’s marriage);
  • Defending traditional notions of morality (the Debtors’ joint bankruptcy filing is in no sense discernible to the court to be a validly challengeable affront to morality, traditional or otherwise, under the Fifth Amendment); or
  • Preserving scarce resources (no governmental resources are implicated by the Debtors’ bankruptcy case different from the resources brought to bear routinely in thousands upon thousands of joint bankruptcy cases filed over the years).

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  1. [...] Last time, we looked at In re Balas and Morales, a decision issued by the federal bankruptcy court in Los Angeles that said that a gay couple who had been legally married in California should be allowed to file a joint bankruptcy, in spite of a federal statute (the Defense of Marriage Act, or “DOMA”) that defines the term “spouse” for the purpose of applying federal law, as “a person of the opposite sex who is a husband or a wife.” [...]

    Pingback by Seattle Debt Law Blog » The Extraordinary Political Twists of the Bankruptcy Decision Allowing Gay Couples to File Bankruptcy Jointly — July 30, 2011 @ 5:04 pm

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