Tuesday, July 12, 2011

Chipping Away at the Defense of Marriage Act: Is a Joint Petition for Bankruptcy on the Way in Massachusetts for Same-Sex Married Couples?

UPDATE: On June 26, 2013, the Supreme Court of the United States declared in United States v. Wilson, that section 3 of DOMA (the "defense of marriage act") is unconstitutional.  Read our analysis of what this changes: SCOTUS decision on DOMA affects Joint Bankruptcies


The Defense of Marriage Act (DOMA) dictates how federal law treats same-sex marriages, by defining marriage as between one man and one woman. DOMA does not forbid states from allowing same-sex couples from marrying, but does limit same-sex married couples from accessing the same federal benefits afforded their opposite-sex counterparts.

There are over eleven hundred federal statutory provisions in which marital status is a factor in determining or receiving benefits from the federal government.  For example, DOMA prohibits a same-sex married couple from filing a joint federal income tax return.

In the field of bankruptcy, DOMA not only forbids a same-sex married couple from filing a joint petition (thereby saving hundreds of dollars in filing fees, as well as losing some of the ease of joint financial planning by dealing with joint debts together), but it also prevents a spouse's or former spouse's claim against the petitioner from being given priority (basically, a debt held by a spouse or former spouse in an opposite-sex marriage is treated as a more important creditor to be paid off, where a same-sex spouse or former spouse is treated as a less-important creditor to be paid off).

In California, a same-sex married couple tried to file a joint Chapter 13 petition for bankruptcy. When the bankruptcy trustee moved to dismiss their petition because of their marriage, they appealed, and the Bankruptcy Court for the Central Division of California ruled that denying the couples' petition violated their equal protection rights guaranteed by the Fifth Amendment. Interestingly, the opinion was signed by twenty of the twenty-four judges in the Central District of California, although the case was heard only by Judge Thomas B. Donovan, sending the message that the bankruptcy judges in the Central District of California believe (well, most of them at least) that the application of DOMA to prevent a same-sex couple from filing for bankruptcy is unconstitutional.

This does not mean that other states will have to follow suit. However, a case in New York was decided along the same lines, and one can only assume that other states will begin to address the issue. Massachusetts has not yet dealt specifically with the issue of same-sex married couples filing a joint petition for bankruptcy, although two separate cases in Massachusetts federal court have ruled that DOMA is unconstitutional.

Kelsey & Trask, P.C. understands that not everyone wants to be a constitutional test case, and for some, operating within the restraints of the law, no matter how unfair, is better in the short term than changing the legal thinking of an entire system. We recognize the limitations and restrictions presented by DOMA. While we cannot extend all benefits of a joint filing, we do recognize and support the same-sex community.

If you need assistance in the bankruptcy court, we will not charge you as separate clients; rather, we will charge the same fee as we would any married couple. We will also do our best to ensure your cases are presented to the same trustee, and remain in front of the same Judge, by filing them simultaneously (giving them the best chance to be in front of the same trustee and Judge).

Joint filings were created in order to protect the family unit and allow for collective financial planning. While federal law currently chooses to deny same-sex married couples from such federal benefits, we have chosen to treat same-sex married couples with the same dignity and treatment as their heterosexual counterparts. It is not a perfect solution, but if it helps your family to get a fresh start, we don’t want you to go alone.

Friday, July 8, 2011

Calm Down for a Second: My $.02 on the Casey Anthony Verdict

Please allow me to go off topic for a minute. It’s Friday, after all.

This week, the jury in the Casey Anthony trial decided that the prosecution did not meet its burden in establishing, beyond a reasonable doubt, that Casey Anthony was responsible for the death of Caylee Anthony. I am not going to provide my own insights as to why the jury decided the way they did, or whether the prosecution or the defense presented their cases in an effective and appropriate manner. The jury has rendered its verdict, and the judicial system has functioned as designed.

The fallout of the jury’s verdict has been as varied as the issues raised at trial. Some have come out in support of the defense and Casey Anthony, others have criticized the prosecution for their inability to secure a guilty verdict on the murder and/or manslaughter charges. Cable news pundits will continue to discuss the implications of this case for days or weeks to come, and the ratings bare out the ongoing interest in this case. Whether you agree with the jury and the outcome, or believe you would have voted differently if you were one of the twelve, there is plenty of room for analysis and reflection. Discourse and discussion are healthy and should be encouraged.

However, I have heard and read growing criticism of “the legal system” from the many people that believe the jury “got it wrong”. Some of the more disturbing comments have been along the lines of death threats, calls for sterilization, or calls for others to kill or injure the accused. Some people are going so far as to levy threats and calls for harassment against the jurors themselves.

More unsettling are calls for a complete overhaul of the legal system to eliminate the “beyond a reasonable doubt” standard required for criminal convictions on a case-by-case basis. Essentially, such calls would allow the government to arbitrarily reduce the standard required to convict someone accused of a particularly reprehensible crime.

I understand that people are angry, and these calls for reform will undoubtedly gather no legislative traction. However, I believe that we all need to take a step back and recognize that our system, although imperfect, is designed to place a burden on the government to prove their claims before we are stripped of any of our individual freedoms. Calling for a reduced standard, or advocating for the death or injury of the acquitted undermines the concept of “innocent until proven guilty” that has been the cornerstone of our criminal justice system since the Bill of Rights was ratified in 1791. In the words of one of our founding fathers:

They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety” – Benjamin Franklin

Friday, July 1, 2011

Staying out of Financial Trouble: Let the Joneses Do Their Own Thing

This planet has — or rather had — a problem, which was this: most of the people living on it were unhappy for pretty much all of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy. - The Hitchhiker's Guide to the Galaxy
Everyone has heard the expression "Keeping up with the Joneses". Many of us consciously or subconsciously compare ourselves to our peers, and use the transfer of wealth (i.e., buying the things that impress others or help us fit into a particular social circle) to keep us happy in our own peer group.

As you are considering a financial reorganization through a debt payment plan or bankruptcy, it is important to identify the risks that will derail your efforts, or worse yet, put you back in the same place you were in prior to bankruptcy or debt relief. One hidden trap is pressure to "keep up with the Joneses" or engage in "retail therapy". While it may be difficult to completely curtail your spending in some of these areas, a recent Bankrate.com article "Are Your Friends Making You Broke" discusses some ways to identify harmful spending habits and suggests some useful alternatives.

Some suggestions:

1. Remember your true friends want what's best for you. Discuss your financial goals with them to alleviate some of the social pressures.

2. Consider the long-term costs and expenses of that expensive new item you have your eye on.

3. Suggest less-expensive alternatives when asked to participate in an activity you cannot truly afford.

4. Consider alternative products and technology that will give you the convenience and functionality, but at a fraction of the price. Sure, GPS-enabled smartphones are great, but asking for directions or a trusty map will get you there too.

Getting and staying out of debt isn't easy, but it can done if you stick to a plan. If you need help working out a plan, the debt relief attorneys at Kelsey & Trask, P.C. are always ready to help.
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