Military Personnel and Bankruptcy

Filing for bankruptcyThe right to file for bankruptcy is not limited to only civilians. Those in the military have the same right to file for bankruptcy as well. In addition, active military personnel and disabled veterans get certain benefits over non-military.

For starters, the Servicemembers’ Civil Relief Act (SCRA) gives active-duty military legal protections in civil actions taken against them. The SCRA gives courts the power to stay or postpone bankruptcy and non-bankruptcy proceedings against military personnel while they are on active duty. These protections are separate from the automatic stay that comes with filing for bankruptcy.

Exempt from Means Test

If filing for Chapter 7 bankruptcy, you must qualify by passing a means test. This was put in place in order to disqualify those who have enough disposable income to pay for a portion of their debts.

If you are a disabled veteran and you incurred your debt primarily while on active duty, then you are not required to take the means test to qualify for Chapter 7 bankruptcy. Members of the National Guard or a reserve unit of the Armed Forces can also be excluded from means-testing requirements for Chapter 7.

If they were called to active duty or performed a homeland defense activity for a period of at least 90 days after September 11, 2001, they will be excluded while on duty and for 540 days following. It is temporary though and you will have to complete the means test no later than 14 days after the exclusion period (540 days).

While these exceptions exist, filing for bankruptcy as military personnel could have a negative impact: your security clearance may be affected. It depends on a number of factors, like your job performance, why you are filing for bankruptcy, and your relationship with your superiors and co-workers.

Your security clearance can also be affected if you have large amounts of outstanding debt. In this case, filing for bankruptcy might help you since it is a step in the right direction toward financial stability. At the end of the day, the effect on security clearance is determined on a case-by-case basis.

Contact South Jersey Bankruptcy Lawyer

As a military member, you should not have to worry about your financial situation. Fortunately, if it comes to bankruptcy you can always utilize the experience of a bankruptcy lawyer.

The Law Office of Joel R. Spivack in South Jersey is a great place to start. Mr. Spivack has over 30 years of experience helping all types of clients in New Jersey navigate bankruptcy. He will put you back into financial stability and make sure you utilize the best bankruptcy option available.

Let him help you get back on track and relieve your debt. Fill out the contact form online to begin discussing your bankruptcy case today.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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