In the recent case of In re James Matson & Kevin Mabry, 2014 WL 1678989 (Bankr. E.D. Wis. 4/29/14), the bankruptcy court denied a creditor’s motion to dismiss or bifurcate the debtors’ Chapter 13 case filed in Wisconsin, which does not permit same sex marriages. The debtors were legally married in Iowa and resided in Wisconsin. The creditor’s motion to bifurcate or dismiss the case was based on the fact that under Wisconsin law, the debtors were not legally considered “spouses.” The debtors responded that the state of Wisconsin did not have authority to deny a lawfully wedded couple any federal benefits, including the right to file a joint bankruptcy case.
The Supreme Court in United States v. Windsor, 133 S.Ct. 2675 (2013) struck down the Defense of Marriage Act’s definition of “marriage” as being the legal union between a man and a woman only, and “spouse” as being a person of the opposite sex who was a husband or wife. The bankruptcy court in the Wisconsin case focused its decision on the issue of where the marriage took place. The court said that “Reliance of the ‘place of celebration’ rule ensures that married couples do not lose their marital status simply because they travel or relocate across state borders. This recognition continues even in states where the marriage could not have been originally performed.” Following the “place of celebration” rule, the court held that it was required to recognize the debtors’ marriage under the Full Faith and Credit Act of 28 U.S.C. § 1738. Because the debtors’ marriage was lawful where originally performed, and Windsor invalidated DOMA’s requirement that legal construction of the word “spouse” refer only to opposite-sex couples, they are deemed “spouses” for purposes of the Bankruptcy Code.
If all bankruptcy courts across the United States follow this ruling, same sex couples, who were legally married in a state that allows same sex marriages, would be permitted to file joint bankruptcy cases even if they later move to a state that does not permit same sex marriages.
The attorneys at the law firm of Margulies & Associates, LLC have assisted thousands of clients through the bankruptcy process. Please call us for a consultation today. Laura Margulies is a principal in the law firm of Laura Margulies & Associates, LLC. To learn more about our firm visit our web site at www.law-margulies.com.