If you’re in the military and you’re thinking about filing for bankruptcy, you’re not alone. Active duty service members file for bankruptcy every year.
It’s important to realize you have the same rights as civilians when it comes to taking advantage of this legal form of financial relief. You also have some resources civilians don’t, like your on-base financial advisor.
Here are some things you need to think about.
Military Star Cards
If you have a Military Star Card you should be aware that it is a dischargeable debt. It is also a debt you must list alongside all your other debts when you file.
Active duty members of the military have some unique career considerations. It’s important for you to have solid legal advice when you file bankruptcy, because you could lose your security clearance if it’s not handled carefully.
Nevertheless, filing for bankruptcy is often the best way to protect your security clearance.
Unless you are in danger of failing the means test, Chapter 7 is likely to be your best choice as it won’t leave you with any outstanding debts or obligations that could leave you vulnerable to bribes. You might also achieve what you need to achieve by staying out of bankruptcy and having your spouse file instead. Much depends on your specific situation.
Disabled veterans who became bankrupt while on active duty do not have to take the means test as long as your percentage of disability exceeds 20%.
If you received a housing waiver and broke a lease, the landlord has to return it after you file for bankruptcy, even if the rest of the lease has not been paid. Doing anything else is considered an attempt to collect a debt under the terms of the automatic stay.
Not all landlords are aware of this law. Often, you will need an attorney’s help to recover this money.
Student Loan Cancellation
If you have Perkins Loans you may be in a better position than most civilians in America. Military personnel can take advantage of loan cancellation.
You may not be able to discharge this debt in bankruptcy (few people can), but you might be able to pursue this avenue before or after bankruptcy to gain an even greater degree of financial relief.
Get expert help today.
Bankruptcies aren’t simple. They aren’t simple for anyone.
And as a member of the military, you can’t afford to go pro se.
Instead, call us to schedule your free consultation. If you’re stationed in either Pennsylvania or New Jersey, we can help.