Till Death Do Us Part: The Dischargeability of Debts Between Those In Domestic Partnerships or Civil Unions

By Professor Michaela M. White, Creighton University and NACTT Academy Editor & Advisor

The Defense of Marriage Act (DOMA) provides a federal definition, applicable in bankruptcy cases, of marriage and spouse. DOMA confines the meaning of “marriage” to a legal relationship between one man and one woman and the status of “spouse” exclusively to a person of the opposite-sex who is a husband or wife. 11 U.S.C. § 7.  In an earlier article, I examined the effect of DOMA’s definitions of marriage and spouse on the dischargeability of debts between same-sex couples formerly united in marriage, domestic partnership or civil union in states that give legal recognition to such legal relationships. The article concluded that unless DOMA is declared unconstitutional, it is likely that debts between same-sex couples are dischargeable because persons of the same sex cannot be considered “spouses” or “former spouses” under § 523(a)(5) (DSO’s) and § 523(a)(15) (property settlements).[1] Therefore, even though a debt would otherwise qualify as a nondischargeable domestic support obligation (DSO) or as a property settlement, the fact that the debt is owed to a member of the same sex makes it dischargeable.

This article begins an examination of the dischargeability of “support” or “property settlement” debts between opposite-sex couples formerly united in a domestic partnership or a civil union rather than in a traditional marriage. Specifically, it outlines the hurdles that will arise in any case in which a creditor, formerly a member of an opposite-sex domestic partnership or civil union, tries to prevent discharge of a debt on the ground it is support-based or is a property settlement.  To my knowledge, the issue has not yet arisen in any reported case and I welcome any information that my readers may have on cases in which the issue has arisen. Lest the reader think this is just another academic exercise, these issues will eventually surface because at present, domestic partnerships between members of the opposite-sex are recognized in California, the District of Columbia, Nevada, Wisconsin, Maine and Washington. Civil unions between opposite-sex couples are recognized in Hawaii and Illinois. The charts at the end of this article summarize these statutes.

But first, why do some states offer domestic partnership or civil union as an alternative to traditional marriage to opposite-sex couples? Since one purpose of recognizing domestic partnerships between same-sex couples is to provide employment benefits to the employee as well as his or her partner, some suggest that domestic partnership must be offered to opposite-sex couples to avoid charges of illegal employment discrimination. See generally Megan E. Callan, The More, the Not Marry-Er: In Search of a Policy Behind Eligibility for California Domestic Partnerships, 40 San Diego L. Rev. 427 (“Callan”) (2003); Paul R. Lynd, Domestic Partnership Benefits Limited to Same-sex Couples:  Sex Discrimination Under Title VII, 6 Wm & Mary J. Women & L. 561 (2000). It has also been suggested that the expansion of domestic partnerships to opposite-sex couples is politically motivated; that is, offering domestic partnership to opposite-sex couples may make more palatable the recognition of a legal relationship between same-sex couples. Callan at 543. Finally, legal recognition of a relationship lying between cohabitation and marriage can provide certain governmental benefits such as social security and Medicaid to opposite-sex couples.

The Old-Age and Survivors Insurance program (OASI) “provides monthly cash benefits to retired workers and their dependents and to survivors of covered workers.” OASI is the largest of the social benefit programs and is the program commonly referred to as Social Security. OASI was primarily established to protect workers over retirement age, age sixty-two at the earliest, who have worked in covered employment for over ten years; additionally, dependents and survivors of the worker may receive additional monthly income under the program, based upon the worker’s primary insurance amount. For married couples, then, social security functions as a joint and two-thirds survivor annuity.

The other social benefit program referenced in domestic partnership legislation is the Supplemental Security Income (SSI). SSI provides monthly cash benefits to low income elderly Americans, as well as to the blind and disabled. The purpose of SSI is explicitly stated as providing security income to these persons; however, the statute’s interpretive notes suggest that security is intended only “to cover basic necessities, but not medical expenses.” SSI does not immediately raise concerns of marital status, although eligibility for SSI guarantees eligibility for Medicaid coverage. In turn, Medicaid eligibility is potentially affected by marital status.

Callan at 450-451.

Whatever may motivate the adoption of domestic partnership or civil union statutes between opposite-sex couples, how will debts between former couples to such relationships be treated in bankruptcy?

Even if the debt is in the nature of support, the Code requires the debt to be “established” (or “subject to establishment”) by “(i) a separation agreement, divorce decree, or property settlement agreement; (ii) an order of a court of record; or (iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit.” 11 U.S.C. § 101 (14A). Therefore, even if a former domestic partner or party to a civil union qualifies as a “spouse,” payment obligation would have to satisfy the “established or subject to establishment” statutory requirement. Similarly, a nondischargeable property settlement debt must be “incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other court of record, or determination made in accordance with State or territorial law by a governmental unit.” 11 U.S.C. § 523(a)(15).[2] These requirements raise state law questions: how are domestic partnerships and civil unions dissolved?  Are there formal statutory mechanisms in place to unwind these legal relationships?  Do courts enter orders dividing property and allocating joint debts?  Is support ever awarded to one of the parties? I am looking forward to doing further research on these issues and will share my results with you in a later article.

However, even assuming the Code’s requirement that DSOs and property settlement debts have a nexus with court orders or dissolution-related agreements can be met, can former domestic partners and members of a dissolved domestic partnership or civil union be treated as spouses for bankruptcy purposes?  Does DOMA limit its definition of spouse and marriage only to opposite-sex couples in traditional marriages? Arguably, it does not because it defines marriage as a “legal relationship” between opposite genders and “spouse” to opposite-sex couples. Thus, opposite-sex couples might satisfy the traditional definition of spouse and could satisfy the requirements of the Bankruptcy Code that nondischargeable DSO’s and property settlements be owed to a “spouse” or “former spouse.” Professor Peter Alexander has suggested that if the “benefits and burdens” of traditional marriage are similar enough to those in a domestic partnership or civil unions, treatment of opposite-sex parties as traditional spouses might be justifiable.  Peter C. Alexander, Better Than Traditional Marriage? The Bankruptcy Benefits To A Divorcee Following A Same-Sex Marriage, Domestic Partnership, or Civil Union (August 24, 2011), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1916322.

DOMESTIC PARTNERSHIPS
California Recognition of legal relationship of domestic partnerships and provides for the same rights, benefits, protections, and responsibilities as married persons.  Both same-sex and opposite-sex couples (over the age of 62) are eligible. “Registered domestic partners shall have the same rights, protections, and benefits, and shall be subject to the same responsibilities, obligations, and duties under law, whether they derive from statutes, administrative regulations, court rules, government policies, common law, or any other provisions or sources of law, as are granted to and imposed upon spouses.”

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fam&group=00001-01000&file=297-297.5

District of Columbia Recognition of legal relationship of domestic partnerships and provides some of the same benefits as marriage.  Both same-sex and opposite-sex couples are eligible. Provides domestic partners with certain rights and benefits that parallel some of the rights and benefits provided to spouses under state law

http://dchealth.dc.gov/doh/cwp/view,a,3,q,573324,dohNav_GID,1787,dohNav,/33110/33120/33139/.asp#4

Nevada Recognition of legal relationship of domestic partnerships and provides for the same rights, benefits, protections, and responsibilities as married persons.  Both same-sex and opposite-sex couples are eligible. “Domestic partners have the same rights, protections and

benefits, and are subject to the same responsibilities, obligations and duties under law, whether derived from statutes, administrative regulations, court rules, government policies, common law or any other provisions or sources of law, as are granted to and imposed upon spouses.”; ” A domestic partnership is not a marriage for the purposes of Section 21 of Article 1 of the Nevada Constitution.”

http://www.leg.state.nv.us/75th2009/Bills/SB/SB283_EN.pdf     http://nvsos.gov/index.aspx?page=274#283

Wisconsin Recognition of legal relationship of domestic partnerships and provides some of the same benefits as marriage.  Both same-sex and opposite-sex couples are eligible. Provides domestic partners with certain rights and benefits that parallel some of the rights and benefits provided to spouses under state law.

https://docs.legis.wisconsin.gov/2009/related/acts/28.pdf

http://etf.wi.gov/publications/et2370.pdf

Maine Recognition of legal relationship of domestic partnerships and provides some of the same benefits as marriage.  Both same-sex and opposite-sex couples are eligible. Provides domestic partners with certain rights and benefits that parallel some of the rights and benefits provided to spouses under state law.

http://www.mainelegislature.org/ros/LOM/lom121st/15pub651-700/pub651-700-32.htm

Washington Recognition of legal relationship of domestic partnerships and provides for the same rights, benefits, protections, and responsibilities as married persons.  Both same-sex and opposite-sex couples (over the age of 62) are eligible. “It is the intent of the legislature that for all purposes under state law, state registered domestic partners shall be treated the same as married spouses. Any privilege, immunity, right, benefit, or responsibility granted or imposed by statute, administrative or court rule, policy, common law or any other law to an individual because the individual is or was a spouse, or because the individual is or was an in-law in a specified way to another individual, is granted on equivalent terms, substantive and procedural, to an individual because the individual is or was in a state registered domestic partnership or because the individual is or was, based on a state registered domestic partnership, related in a specified way to another individual.”

http://apps.leg.wa.gov/RCW/default.aspx?cite=26.60&full=true

CIVIL UNIONS
Hawaii Recognition of legal relationship of civil unions and provides for the same rights as married couples.  Both same-sex and opposite-sex couples are eligible. “Partners to a civil union lawfully entered into pursuant to this chapter shall have all the same rights, benefits, protections, and responsibilities under law, whether derived from statutes, administrative rules, court decisions, the common law, or any other source of civil law, as are granted to those who contract, obtain a license, and are solemnized pursuant to chapter 572.”

http://www.capitol.hawaii.gov/session2011/bills/SB232_HD1_.pdf

Illinois Recognition of legal relationship of civil unions and provides for the same rights as married couples.  Both same-sex and opposite-sex couples are eligible. “A party to a civil union is entitled to the
same legal obligations, responsibilities, protections, and
benefits as are afforded or recognized by the law of Illinois to spouses, whether they derive from statute, administrative rule, policy, common law, or any other source of civil or criminal law.”

http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=096-1513

[3]


[1] See Susan E. Hauser, More Than Abstract Justice: The Defense of Marriage Act and the Equal Treatment of Same-Sex Married Couples Under Section 302(a) of the Bankruptcy Code, 85 Am. Bankr. L.J. 195 (2011), for a thorough analysis of the constitutionality of DOMA.

[2] Property settlement debts are nondischargeable in Chapter 7, but may be discharged in Chapter 13. §§ 1328(a); 523(a)(15).

[3] I would like to thank my research assistant, Vijay Malik, for his help researching this article.


Professor of Law, Michaela White received her Bachelor of Arts degree in 1976, and her Juris Doctor degree, magna cum laude, in 1979 from Creighton University, where she was on the Creighton Law Review Editorial Staff and a member of the Moot Court Honors Board. She was law clerk to The Honorable Donald R. Ross of the United States Court of Appeals for the Eighth Circuit and for The Honorable Fallon Kelly of the Minnesota Supreme Court. She practiced law in Minnesota from 1980-1983, and then served as the Assistant Attorney General for the Nebraska Department of Justice. Prof. White joined Creighton after serving for six years as a Professor of Law at McGeorge School of Law. Most recently, Prof. White authored the book, When Worlds Collide: Bankruptcy and Domestic Relations Law, 4th Ed. (American Bankruptcy Institute, 2010).


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