Recently the United States Attorney General announced that the United States Government expanded the recognition of same-sex marriages in federal legal matters including bankruptcies, prison visits, and survivor benefits. For same-sex couples needing to file bankruptcy this cold end up resulting in significant savings as they can now file a joint bankruptcy petition.
When filing bankruptcy, married couples are allowed to file one bankruptcy petition. This often ends up in a more efficient administration of the bankruptcy case as the assets and finances of a married couple are so intertwined that it makes sense to have them dealt with in one proceeding instead of two. Also, it represents real financial savings for a financially distressed couple. Prior to this ruling, if a same-sex couple wanted to file bankruptcy they would each have to file a separate petition and that means two filing fees, two sets of attorney fees, and have two separate court hearings.
However, this ruling does not mean that all same-sex couples can file a joint bankruptcy petition. In order to file a joint petition, the couple must have a legally valid marriage from a state that recognizes same-sex marriage. So, if a couple had been married in New York which recognizes same-sex marriage, they could file a joint bankruptcy petition in Michigan. However, a marriage performed in a state that does not recognize same-sex marriage would not entitle that couple to file their own joint bankruptcy petition.
If you have questions about how this new policy of the Federal Government may affect you, please don’t hesitate to contact us and ask for help.