Same-sex NY couples subject to federal bankruptcy law

When same-sex couples in New York decide to file for bankruptcy, their legal obligations and rights may be dependent on the nuances of multiple laws. In addition to needing to adhere to state and territory regulations, these couples often rely on standards set by national bodies like the United States Trustee Program to learn how the Bankruptcy Code and Rules will affect their particular situation.

According to the U.S. Department of Justice, married same-sex couples will be treated the same as opposite-sex couples regardless of whether the state where they live actually recognizes the relationship. The same standard applies to territories, possessions and foreign regions. The nature of the union in question also plays a role in whether it will be deemed valid. For instance, the DOJ explicitly states that non-consensual marriages aren’t recognizable in the U.S. even if they are in other nations.

Note that although the USTP makes an effort to reach out to judges, debtors and other parties to suggest that married same-sex marriage couples should receive the same treatment as their opposite-sex counterparts, it can’t force other agencies to follow through. The DOJ acknowledges that some parties in bankruptcy litigation may decide not to apply the USTP’s policy to same-sex couples.

As laws governing same-sex marriage change, New Yorkers may find that legal uncertainties directly impact their cases. Courts that decide their unions aren’t valid, for instance, could fail to allot benefits or allowances that might make the bankruptcy process easier to get through. Similar problems can impact same-sex couples that decide to come to New York to get married. Some couples seek legal advisement to learn more about their debt options and devise an effective filing strategy.

Source: The United States Department of Justice, “Frequently asked Questions (FAQs)- Consumer Information“, November 07, 2014