Does a Bankruptcy Claim Affect Military Enlistment?

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Americans idolize the brave men and women who serve in the United States military because they exhibit great bravery. But unfortunately, servicemembers face some of the same day to day problems that civilian consumers have to deal with. Personal problems, including unmanageable finances, can seriously affect military families. National legislation helps to protect military service members and their families from certain civil actions, but how does bankruptcy affect a person's enlistment in the military?

Bankruptcy Before Enlistment

People choose to join the military for many reasons, but some see it as a secure career in a world with an uncertain job market. They may not have the education needed to find a rewarding position in the civilian workforce. The military is not just about combat, and it may provide opportunities for many people.

But can a person enlist in the military if they are in the middle of a bankruptcy claim or had one in the past?

Issues With Confidential Information

Many jobs within the different branches of the military require a security clearance because these individuals need to deal with classified information. Some positions require the servicemember to know the names and Social Security numbers of other individuals, while other individuals in the military are given top secret information on combat and locations.

A bankruptcy claim can affect a person's ability to enlist in the armed forces because it affects their ability to get a security clearance. There are many different circumstances that lead a person to file for bankruptcy, but the U.S. military wants to make sure that sensitive information is not getting into the hands of untrustworthy individuals. The military carefully reviews each application before deciding whether or not a person's bankruptcy filing affects their ability to serve in the military.

An active or past bankruptcy claim can affect a person's enlistment into the military, but it can also affect their ability to get a promotion. The United States Code of Military Justice outlines the standards of behavior and character that are expected of those serving in the military. In order to ensure that servicemembers dealing with sensitive information adhere to these high character standards, the military will consider a bankruptcy claim in addition to a person's personal and professional credentials when evaluating them for a higher security clearance and position.

In order to protect the servicemembers that are trying their best to make ends meet while they are on active duty, Congress passed the Servicemembers Civil Relief Act.

Servicemembers Civil Relief Act (SCRA)

The Servicemembers Civil Relief Act protects active duty military personnel and their families from civil actions, such as foreclosure or law suits, so that the enlisted man or woman can avoid personal distractions while fighting for their country. The act also puts a maximum interest rate on loans, such as mortgages, auto loans, or credit card debt.

The law states that military servicemembers are protected from civil actions until they return from active duty. But bankruptcy doesn't really qualify as a "civil action" since the debtor is the one who initiates it. However, the law offers other protections. For example, the SCRA does not require the enlisted person to pay personal debts, but it doesn't protect them from being forced to pay commercial debts, child support, or alimony. To force these payments, the military can garnish, or take, a certain percentage of your weekly wages. Creditors trying to collect on personal debts cannot file for wage garnishment. Instead, they may try to file for civil action, but the SCRA may prevent that from being completed.

The SCRA should not be understood to mean that the servicemember is immune from paying their personal debts, such as a car loan or credit card debt. In fact, the servicemember can be punished for nonpayment of debts under the Uniformed Code of Military Justice. Sometimes, this can result in the person being court-marshalled. Additionally, because non-payment of debt is violating military code, it could jeopardize the servicemember's ability to leave the military with an honorable discharge and collect a retirement pension.

Filing for Bankruptcy While on Active Duty

Filing for bankruptcy while in the military may be tricky because the debtor must personally appear at credit counseling meetings, which are required under certain chapters. According to Florida statutes §95.11(2)(b), Creditors have up to five years in the state of Florida to sue a debtor for collection. If that time period is approaching and the creditor files a civil action against the servicemember, it may be in their best interest to file for bankruptcy rather than push the action back by applying sections of the Servicemembers Civil Relief Act. Although it may be difficult to coordinate, filing to bankruptcy can offer some additional protections to individuals struggling with the finances while serving in the military.

When you're away from home, it can be tough to concentrate on the task at hand. And if you're serving in the military, attention is vital. Call a bankruptcy lawyer to learn about your options if you are in the military and considering filing for bankruptcy.