A Florida couple is facing some legal opposition to their joint bankruptcy filing because their same-sex marriage is not recognized in the state. The southwest Florida residents were married in a state that does allow same-sex marriages and have owned and managed rental properties together in the past. Facing hard financial times and unable to make their mortgage payments, the couple filed for bankruptcy just as any Florida family would.
The case becomes complicated because the two have thoroughly intertwined finances, as most married couples do, but are not eligible for many benefits under either Florida or federal laws, either of which recognize same-sex marriage. Since bankruptcy laws are made on the federal level and the case is being heard in a Florida court, the two may not be able to file joint bankruptcy.
The case deals with jointly owned property in several states and a joint filing could save the two about $1,800 in the end. Along with savings in fees, filing jointly also offers benefits for couples who share debt, insulating both from collections instead through one efficient process. If they must file separately, the court and shared creditors will go through a duplicative process and it may be more difficult to protect assets and fairly distribute payments while each case is being resolved.
If their case is dismissed from the court because of the legal status of their marriage, the may file an appeal that would challenge the controversial federal law the Defense of Marriage Act (DOMA). A case assessing the constitutionality of DOMA was heard by the Supreme Court this session in the context of estate taxes for legally married same-sex couples. The outcome of that case could have an impact on cases like this Florida bankruptcy filing, allowing the two men to move forward with their joint petition if the law is deemed unconstitutional.
Source: USA Today, “Fla. gay couple’s legal move could lead to big changes,” Marisa Kendall, May 2, 2013.