The Supreme Court is weeks away from deciding the future of marriage equality, but people in same sex marriages across the country still have a lot of questions about how different laws apply to them. Married couples enjoy many different legal benefits, including bankruptcy options if those ever need filed. How do bankruptcy laws apply to same sex couples filing in Ohio, where same sex marriages are not yet recognized?
State courts and federal courts have separate jurisdictions. That means each court system has its own rules and hears separate cases to which those rules are applied. All bankruptcy proceedings are federal matters and thus filed in the federal court system. No matter what state you live in the federal bankruptcy code will apply to your proceeding as it will be filed, heard and decided in a federal court.
In 2014, US Attorney General “directed the Justice Department to give same-sex married couples ‘full and equal recognition, to the greatest extent under the law.'” Because bankruptcy proceedings are all federal, this federal directive means couples in same sex marriages are entitled to all the benefits a married couple enjoys when filing bankruptcy, which includes the right to file jointly.
Thus, although Ohio doesn’t recognize same sex marriage, all legally married same sex couples filing bankruptcy in a federal court located in Ohio have the option to file jointly or individually.
- Joint bankruptcy petition – Allows many married couples the best outcome in bankruptcy with the most exempt property and dischargeable debts. Your bankruptcy petition will include you and your spouse’s property, debt, income and expenses. This option allows you to wipe out both parties dischargeable debt in one proceeding. It generally saves both money and time because your family goes through one bankruptcy instead of two.
- Individual bankruptcy petition – In some cases, having one spouse individually file bankruptcy provides the better outcome. This could happen if the couple jointly owns too much property making some assets nonexempt, or if one spouse has a lot of non dischargeable priority debt.
If you’re considering bankruptcy it’s important to speak with a bankruptcy attorney from Cleveland Bankruptcy Attorneys at (216) 586-6600 about your case. Your lawyer will evaluate your circumstances and help you make the best decision about how to file your bankruptcy and how to move forward once you have.
No matter how you file, don’t try to go through a bankruptcy without the help of a knowledgeable professional. The Bankruptcy Code is dense and complicated, and you will not achieve the best outcome if you don’t have someone by your side to help you navigate it.