Last week the U.S. Supreme Court handed down one of the most momentous decisions of our age. In the case Obergefell v. Hodges, the majority of the court ruled that states could no longer deny same-sex couples the right to marry. Now, not only can these couples legally marry, but they will also be able to enjoy the protections, rights, and benefits that heterosexual couples enjoy which are bestowed after getting married.
The impact of this case will be felt in many different ways throughout the country and our legal system as a whole. For instance, same-sex couples will now be able to take advantage of certain tax breaks and inheritance or estate rules that flow from marriage. Additionally, since more couples will now be able to legally join their assets through marriage, debt collectors and financial institutions will also see their practices change in many ways the near future.
The Fair Debt Collections Practices Act (FDCPA)
The purpose of the FDCPA is to protect consumers from predatory, aggressive, and otherwise inappropriate debt collection practices. The FDCPA allows debt collectors to contact a person’s spouse in certain circumstances to talk about the person’s delinquent debts. Because the Supreme Court legalized same-sex marriage, debt collectors will now be able to contact a much larger pool of legally-recognized husbands and wives in order to discuss a person’s outstanding debts.
Last year, the Consumer Financial Protection Bureau wrote a memo confirming the Bureau’s policy to recognize all marriages that were entered into in jurisdictions where same-sex marriage was already allowed. The memo also set forth that this recognition would apply across the board to all policies, regulations, and statutes that were administered or enforced by the Bureau which include the Equal Credit Opportunity Act, the FDCPA, the Real Estate Settlement Procedures Act, and the Truth in Lending Act.
Community Property Law
In general, there are two different ways that state laws treat the property of married spouses. One way, called equitable distribution, states that if a person’s name is on the asset then the asset belongs to that person. The vast majority of the country uses equitable distribution laws. Conversely, in a small minority of 9 states, community property is the rule of law. In community property states, the assets and liabilities either person incurs during the life of the marriage are attributable to both spouses. However, Georgia is an equitable distribution state so most same-sex couples in our communities will not need to worry about the community property laws.
A very important class of debts that may be affected by the rules are medical debts.
Just like with marital property, some states treat medical debts using the doctrine of necessaries which basically establishes that it is the responsibility of the husband to incur debts on behalf of his wife for items that are deemed necessaries such as clothing, food, shelter, medical care, and children’s education. In recent years, most states expanded this doctrine to make it apply equally to husbands and wives in order to make spouses liable for each other’s debts. The Supreme Court ruling will likely now make the doctrine of necessaries applicable to same-sex spouses as well.
Joint Bankruptcy for Same-Sex Spouses
As discussed elsewhere on our blog, married couples can file a joint bankruptcy together. While some bankruptcy courts already allowed same-sex couples to enjoy this benefit, the Supreme Court ruling will likely ensure that all couples can now file joint bankruptcies.
If you have questions about the bankruptcy process, contact our office today at 404-913-1529 to speak to one of our bankruptcy attorneys about your case. We look forward to working with you!