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Breakthrough in State

Last month's passage by the New York Legislature and signing into law by Governor Cuomo of the Marriage Equality Act ("the Act"), which became effective on July 24, 2011, is the biggest breakthrough in this State. This law now formally recognizes otherwise-valid marriages without regard to whether the parties to the marriage are of the same or different sex. Under Section 2 of the Act, the marriages of same-sex and different-sex couples must be treated equally in all respects. The law does not preserve any legal distinction between same-sex couples and different-sex couples with respect to marriage!

Besides simply allowing same-sex couples to marry, the impact of the Act on real estate and bankruptcy laws is huge:

1. Under New York law, married couples are allowed to own real property as tenants by the entirety. Real property owned as tenants by the entirety receives extra protection from creditors. A debtor spouse may sell her interest in a tenancy by the entirety under execution upon a judgment against her and the purchaser at such sale will become a tenant in common with the debtor's spouse subject to her right of survivorship and is entitled to share in the rents and profits, but not the occupancy of the house. See, In re Weiss, 4 B.R. 327, 330 (S.D.N.Y. 1980).

So, a creditor can execute a judgment against a debtor spouse's interest in real property, and collect half of the rent from that property, but cannot foreclose on occupy that property.

Thus, same-sex couples who had acquired property as tenants in common could convey the property to each other as tenants by the entirety after their marriage.

2. Under federal bankruptcy law and the New York Civil Practice Law and Rules and Debtor and Creditor Law, married debtors can file a joint bankruptcy petition.

Section 302(a) of the Bankruptcy Code provides that "[a} joint case under a chapter of this title is commenced by the filing with the bankruptcy court of a single petition under such chapter by an individual that may be a debtor under such chapter and such individual's spouse." And although New York law does not specifically mention joint debts, all exemptions in personal bankruptcy and from money judgments are "per person."

Natalia Gourari, Esq.
Articles and consultations authored by attorney reflect the state of law as of the date of their writing. The laws change daily. Users of this site are advised to consult attorney regarding their situation.
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