If you are a military personnel and serving the nation, you have the same rights as any other civilian to file for bankruptcy and urge for protection from intimidating creditors. There are no legal restrictions as of now to prevent you from filing personal bankruptcy and requesting protection under either the Chapter 7 or Chapter 13 provision.
Though the military personnel maintain a prudent lifestyle while far away from home, it’s not that they are immune to financial hardships or accidents. Just like us, they too have homes and families and can definitely accrue debt in regular situations.
In order to protect national interests, the military follows protocols that involve checking the financial status of the individuals. Military personnel accessing classified information are required to go through extensive background checks and top-tier security clearances. Unfortunately, Following are few questions that you might encounter during top-tier security clearances:
If you are an active military personnel and seriously considering bankruptcy, you should sit with an experienced bankruptcy lawyer and understand both the boons and pitfalls of filing bankruptcy. In recent years, who are suffering with their finances. This law, named as Service Member’s Civil Relief Act, offer special protections during filing bankruptcy. Indeed,
This act either prevents or delays:
Common civilians need to go through a means test during the Chapter 7 bankruptcy procedure. However, individuals who serve in the National Guard or are disabled veterans, are exempt from this test. Nevertheless, there are several limitations on this exemption. Check those with your lawyer.
Nowadays, disabled veterans are given special privileges during bankruptcy filing if the disability occurred during the service. Particularly, exemption is offered only if the debt is accrued during:
As per the HAVEN (Honoring American Veterans in Extreme Need) Act signed on Aug 23, 2019, if you are a military veteran and file bankruptcy, then your specified federal disability payments will not be included while calculating your income. Such benefits include the following:
However, it will also affect which bankruptcy you can qualify for. The bankruptcy filers need to calculate their CMI (Current Monthly Income) to decide whether or not you qualify for it through the means test (in case of Chapter 7) or how much payment you can afford (in case of Chapter13). While doing this, as a military veteran, you can exclude your disability benefits from your CMI.
Active members of the National Guard are also given some sort of privileges while filing Chapter 7 bankruptcy. However, there are some clauses and those follow:
In order to successfully file for bankruptcy, the regular debtors are required to opt for a credit counseling course. However,
Veterans, who receive many benefits due to their years of service to the nation, are also granted some protections during bankruptcy. While in many states the benefits are automatically imparted, there are some states that actually try to seize veterans’ benefits. However, a veteran has the rights to take action in some cases where his/her benefits are being confiscated.
In our society, the military personnel are regarded with a high degree of estimation. If a military personnel is experiencing financial hardships, he/she should file for bankruptcy if it’s unavoidable. All the benefits being said above, we can conclude with that bankruptcy is a viable option for those individuals who are serving in the military.