New York State Common Law Marriage

Based upon prior US traditions, when a man and a woman began living together and publicly stated they married, over a period ranging from 5 to 15 years (depending upon the state of jurisdiction), state law generally deemed them to be husband and wife for all legal purposes. Putative husbands frequently were required to pay alimony based upon the testimony of his companion, and perhaps the testimony of a few of her friends. Because of the potential for abuse, few states now recognize common law marriages. In bankruptcy court, the law of the state of residency determines marital relation and the nature of the bankruptcy estate, bankruptcy exemptions, and the discharge of debts through bankruptcy.

In practice - New York State common law marriage prohibition

Consider an example. A man and woman arrive at their vacation destination and check in to a hotel under the name of Mr. and Ms. Doe. They have now represented to the world they are husband and wife, even if neither of them is named Doe. If they do this twice, during any 5 year period, the woman potentially could sue for alimony based on written documentation of their common law marriage. Or, should could claim a double exemption of property in bankruptcy, in favor of her newly identified husband. New York common law marriage was abolished for this reason, to stop the flood of frivolous claims for divorce.

The US Bankruptcy Code generously incorporates New York State statutory laws into the administration of Chapter 7 liquidation, Chapter 13 plans, and Chapter 11 reorganization cases. The application of State Law in Federal Court is essential for resolving legal issues pertaining to the ownership of property, debtor and creditor rights, employment law and employee rights, enforcement of judgments, determinations of liability, family obligations, and many more individual rights when dealing with large corporations. Each year, as the State Legislature in Albany enacts new statutes, or amends existing statutes, the ripple effect impacts all New York citizens' rights in Federal Bankruptcy Court.

Amendments contained in New York State statutory law can dramatically affect the administration of bankruptcy cases and determination of assets subject to seizure and also affect the dischargeability of debts. Notice the following recent changes in bankruptcy practices throughout the state:

• A New York City corporate litigation law firm and New York City business dispute lawyers recently teamed up to claim unpaid executive compensation packages are entitled to priority payment before distribution of assets to general employees or creditors in Chapter 11 bankruptcy.
• After bankruptcy, the same New York City litigation lawyers and team of New York business dispute lawsuit lawyers also claimed that their attorney fees should a even higher priority, above payment of salaries to employees.
• Similarly, a team of New York City corporate litigation lawyers and New York property damage litigation lawyers claimed a pending, contingent class action suit must be funded, with proceeds held in trust, before payment of claims to general unsecured creditors in bankruptcy cases.
• The same New York corporate litigation law firm and New York law firm dispute litigation lawyers also claimed, that attorney fees in class action suits, even though the defendant is in bankruptcy, are not required to bear a logical relationship to potential benefits, if any, for plaintiffs included within the designated class of victims. Theses New York City law firm dispute litigation lawyers were not successful.

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