Can same sex couples file for bankruptcy together in New York?
As of June of 2013 for legally married gay couples the answer is yes. In a groundbreaking decision by the United States Supreme Court in United States v. Windsor the court struck down Section 3 of the Defense of Marriage act paving the way for legally married same sex couples to be granted the same federal benefits as other married couples. This includes the right to file for bankruptcy together in states allowing gay marriage like New York.
All married couples gay or straight, have the added benefit in New York of being able to use either the state or federal exemptions in their bankruptcy. When the federal exemptions are used married couples filing jointly may double their exemptions allowed to protect their assets-even on a single piece of property that is jointly owned. Also, filing jointly will allow you to eliminate all of the dischargeable debt for the household. This will give you both debtors a fresh start, whereas if only one spouse filed the non-filing spouse would still be on the hook for their separate debts, and even worse, their portion of the joint debt as well.
If you are married in New York and planning to go bankrupt separately you may consider filing with your spouse to take advantage of the enhanced exemptions. For many couples, filing jointly will help discharge more debt and save more jointly owned property. However, while filing together may be your legal right, gay or straight, it is not always the best bankruptcy strategy. Sometimes depending on your specific financial situation and the types of debts you have it may be better for each spouse to file individually.
For example, when you file jointly with your spouse all of your combined assets whether owned jointly or separately is now part of the bankruptcy. Even though exemptions can be doubled in New York for joint filers it may still be the case that the value of your combined assets is more than the exemptions available to you. In this case we usually recommend married couples file two separate bankruptcies.
If you and your spouse file for bankruptcy individually then it may become possible to use spousal deductions on the bankruptcy means test that would otherwise be unavailable if you were filing together. Since would be filing two separate cases you could use certain spousal deductions in both cases. This could offer a better bankruptcy outcome and more actual protection from your creditors then filing jointly. Consult a qualified attorney.
Whether you are gay or straight the decision to file for bankruptcy with your spouse, can be very complex and will depend on your debt amounts and the types of debts you share. Working with an attorney in New York is critical to the process. If you live in New York and are having trouble deciding how you and your spouse should file please give the Law Offices of William Waldner a call at 212-244-2882 for a free bankruptcy consultation today. We only practice bankruptcy law and can help all couples gay, straight, married, or not with their debt problems.
This article is intended for educational purposes only. By reading this article no attorney-client relationship has been created.