Can I File for Bankruptcy If I'm in the Military?

If you have debts but no way of paying them off, and your army reserves income is insufficient to cover this debt, you may be able to file for bankruptcy.

The army may discharge you if you are guilty of desertion or missing movement training. If you are found guilty of stealing or dishonesty charges, the commander may also decide to discharge you. No authority can discharge the person simply because he is a military member. The decision will be based on your crimes and whether or not you are facing punishments under military law for these crimes.

If it is a matter of debts, then you have to remember that although your army reserves income may be insufficient to cover all your debts, there must be some amount in which your army reserves income accounts for the total of your debts, even if military law may cover a lesser amount. It is good to remember that the army is a branch of government, and you should always go through military channels to resolve any personal problems. However, sometimes it is found that the action taken by the military against you may be too harsh for your crime.

Filing for Bankruptcy in the Military

Bankruptcy is commonly used as a way of getting a fresh start for those who are financially in need. However, some conditions must be met in order to file for bankruptcy, depending on the level of your debt and whether or not the debts are from military service. If an individual has a lot of debt resulting from military service and has no other means of paying off these debts, then he may be eligible to file for military-related bankruptcy. Bankruptcy is commonly used as a way of getting rid of debts, but in many cases, it will not do anything to wipe out your military debts. Whether or not you are eligible to file for bankruptcy depends on the total amount of your debts and how much your military income can cover, if any. If you have already filed for bankruptcy in the past, but have paid off all of your debts, then you may be able to get a refund from the court on filing fees.

Servicemembers Civil Relief Act

The Servicemembers Civil Relief Act, authorizes the government to suspend a person's ability to file for bankruptcy for personal debts incurred because of military service. Federal public agencies, such as credit card companies, can also refuse to honour personal debts if it is believed that the debt originated from military service. The act is designed to protect soldiers in their immediate post-military life from being ruined by debts from which they cannot easily escape. It also prevents the government from having to repay your debts for you. It does not apply if your debt was incurred before your military service.

Some people do not qualify for bankruptcy but are, in fact, eligible for other types of relief under state or local laws. There may be laws that specifically recognize your military service as a special cause for losing eligibility for bankruptcy. Other debt relief options include a debt management plan or a payment plan where you pay off the debts through monthly payments over a period of time.

Special Protections and Exemptions

You may also be eligible for additional protections from creditors and other parties, including the government. For example, you may qualify for special forms of debt relief that are only given to military veterans who are facing financial hardships. These exemptions and protections will not take away your debts or affect your ability to pay back the debts in court or in a bankruptcy proceeding but will allow you to avoid being jailed or having criminal records related to debt.

You may also be eligible for special forms of assistance that are only given to military veterans who are facing financial hardships, such as a type of income tax exemption. These exemptions and protections will not take away your debts or affect your ability to pay back the debts in court or in a bankruptcy proceeding but will allow you to avoid being jailed or having a record related to debt-related crimes.

Filing for Bankruptcy May Affect Security Clearance

If you have a security clearance, then filing for bankruptcy may have adverse effects on this clearance as well. You will probably have to obtain written permission before being allowed to file for bankruptcy. You should also contact your financial institutions and creditors before filing in order to be informed of any potential problems or complications related to bankruptcy filing. You should also know the procedures for how to handle your debts so that you can begin the process of paying back your creditors after filing. It may be impossible to pay off all debts in full, but filing for bankruptcy may help you get a fresh start.

Bottom Line

If you are in the military and have debts that cannot be paid, then you may be eligible to file for bankruptcy. You may also qualify for other forms of debt relief as well. If you are committed to paying off your debts, then it is best to pay off your debts as soon as possible. If you are in a lot of debt and your military income is not sufficient to pay all of your debts, then you may want to consider filing for bankruptcy. Bankruptcy may not wipe out all of your debts, but it will allow you to get a fresh start in life by getting the burden of the debts taken away from you.