Married gay couples in Michigan can file joint bankruptcy, taxes

Same-sex marriage in Michigan has been a matter of national interest following a series of events that left nearly 300 gay and lesbian couples in a state of matrimonial limbo. The U.S. government announced recently that it will recognize those marriages for purposes of federal law even if the Michigan government does not recognize them at the state level. This means that same-sex married couples in Michigan have access to federal marriage benefits, including the option of filing jointly for federal taxes and bankruptcy.

New U.S. policy interprets gay marriage rights broadly

In February 2014, the Obama administration announced that the federal government would recognize legally performed same-sex marriages for purposes of federal taxes, bankruptcy, survivor benefits and other matters of federal law. Under the new policy, the U.S. government provides broad recognition of same-sex marriages rights in order to ensure equal rights for married couples regardless of sexual orientation.

The change was viewed as a significant landmark in the gay rights movement because it applied to same-sex couples who are legally married in any state, regardless of whether they are currently living in a state that recognizes gay marriage. Thus, for example, a same-sex couple that was legally married in Massachusetts can file for bankruptcy jointly under the new policy even if that couple is now living in Michigan, where same-sex marriages are not currently recognized. In the past, such filings could be subject to challenges by the U.S. government.

Recent developments in Michigan

In March 2014, a federal judge struck down Michigan’s ban on same-sex marriage, but the decision was stayed until it can be reviewed by an appellate court. Before the stay was issued, however, nearly 300 gay and lesbian couples were married in Michigan, giving rise to some complex legal issues.

State officials have announced that although they consider those marriages to be legal and valid, they will not be recognized by the state government until the stay is removed. The federal government, on the other hand, stated that it will recognize those marriages for purposes of federal law. In a statement issued March 28, 2014, U.S. Attorney General Eric Holder said “Michigan couples will not be asked to wait for further resolution in the courts before they may seek federal benefits to which they are entitled.”

Joint bankruptcy

When married people file for bankruptcy protection, they have the option of filing jointly or separately. Each type of bankruptcy filing has its pros and cons, and is appropriate for different situations. Michigan couples who are interested in learning about their bankruptcy options are encouraged to get in touch with an experienced bankruptcy lawyer for help finding the right solution for their unique circumstances.