Monthly Archives: August 2010

I practice in Massachusetts where same sex marriage has been not only legal, but rather commonplace since 2004.  Bankruptcy, however, is Federal Law, and as a result subject to the so-called “Defense of Marriage Act” or DOMA.  Enacted in 1996, DOMA purports to protect marriage, by denying federal recognition of marital rights to certain couples who are legally married in some states.  Specifically, 1 U.S.C. § 7, applies the following definition of “marriage” and “spouse”:  “In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word “marriage” means only a legal union between one man and one woman as husband and wife, and the word “spouse” refers only to a person of the opposite sex who is a husband or wife.

Recently, Judge Tauro of the United States District Court for the District of Massachusetts, issued an opinion striking down DOMA as unconstitutional on Equal Protection grounds.  Similarly, a Federal Judge in California recently issued an opinion which used constitutional Equal Protection grounds to overturn California’s “Proposition 8” which denied marriage rights to same sex couples.  Both of these opinions are likely to be appealed and may well land on the steps of the United States Supreme Court before all is said and done.  The purpose of this article is not to examine the constitutionality of DOMA, but rather to examine its affect upon Massachusetts residents and to a lesser extent the other juridictions where same sex marriage is legal (namely Vermont, Connecticut, Iowa, New Hampshire, the District of Columbia and, pending appeal, California).

In most states among the many rights that married couples enjoy is the right to seek protection from creditors under the United States Bankruptcy Code under a joint petition.  Filing together, married couples are allowed to “pool” exemptions to protect marital assets from creditors.  In Massachusetts and other jurisdictions where same sex marriage is legal, this right is denied by DOMA to some married couples, forcing same sex married couples whose debts are often, like other married couples, joint debts and whose assets are all marital by state law definition.   The purpose of exemptions are to allow bankruptcy filers to keep enough property to support themselves, and in the case of a married couple, enough to support the couple.  A same sex couple is particularly denied the right to protect enough assets to support the couple in bankruptcy.

The issue is particularly difficult when looking at the largest asset for most families, namely, a house.  In Massachusetts, where home prices are high, the Homestead Act protects up to $500,000.00 of equity in a home.   In order to qualify for the protections of Homestead in Massachusetts, a homeowner must file a “Declaration of Homestead”.  The Homestead then acts to protect an entire family.  Under Massachusetts law, the family includes the same sex spouse.  However, under Federal law (DOMA) “same sex” and “spouse” are words that cannot be used together at all.  As a result, the Massachusetts Homestead is in flux when it is applied to a same sex couple in bankruptcy, where it must be interpreted under DOMA.  More importantly, under Massachusetts Law only one spouse may record a Declaration of Homestead, a subsequently recorded Declaration of Homestead will void the first Declaration of Homestead.

None of this should be taken to imply that bankruptcy protection is in any way unavailable to same sex couples.  It does mean that it is a far more complicated issue when a same sex couple is seeking relief under the United States Bankruptcy Code.  Accordingly, it is imperative that proper planning based on the couple’s individual circumstances begin as early as possible.  If you are experiencing financial difficultly you should meet with a qualified bankruptcy attorney sooner rather than later to properly plan the best course of action to protect your assets from creditors.  To schedule a free consultation with an experienced bankruptcy attorney, call the Law Offices of James Wingfield at 508-797-0200 or visit the contact page on our website.