Can Domestic Partners Stack Exemptions: Not In California

Married couples who file bankruptcy jointly are permitted to "stack" bankruptcy exemptions according to most court decisions. For example, married Florida debtors who do not qualify in bankruptcy for unlimited homestead protection could stack their $125,000 exemptions and claim a total of $250,000 homestead protection (the exemption increases April, 2007 to approximately $137,000 per person). A California bankruptcy court denied a request by "domestic partners" to stack California’s homestead exemption in their consolidated bankruptcy petitions. 

The domestic partners filed separate bankruptcy petitions. The two cases were consolidated for administration at the request of the Chapter 7 trustee. Pursuant to California Domestic Partner Rights and Responsibilities Act (DPRRA), registered domestic partners are treated as "spouses," and thus as "married" for purposes of the state's homestead statute. The California Legislature explained that the DPRRA was to be 'construed liberally in order to secure to eligible couples who register as domestic partners the full range of legal rights, protections and benefits, as well as all of the responsibilities, obligations, and duties to each other, to their children, to third parties and as to the state, as the laws of California extend to and impose upon spouses.

The bankruptcy court denied these debtors the ability to stack homestead exemptions. The court found that § 302 of the Bankruptcy Code limits joint filings, and the payment of a single fee, to married partners of the opposite sex and that as a matter of federal law a domestic partnership is not a disguised form of marriage.

To those requiring authority: In re Rabin, 2007 WL 315774.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida