Bankruptcy Options for Ex-Military Personnel

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For those who are in the military or who have left the military, there are programs to assist with bankruptcy and financial problems. Being in the military often places a significant amount of stress and strain on a family’s financial situation. Many leave the military to pursue more profitable jobs. Nevertheless, they may find themselves still unable to pay down debt. When this occurs, many people turn to bankruptcy.

Is Bankruptcy Necessary?

As an American citizen, those who are ex-military personnel have all of the same rights to file Chapter 7 bankruptcy or Chapter 13 bankruptcy. These rights are not different for those who are military, though. However, there are some reasons to take notice of the options outside of bankruptcy that could help some ex-military personnel to avoid this negative financial impact.

The Servicemembers’ Civil Relief Act, or SCRA is an option that can help some military personnel, both active duty and no longer part of the military, to avoid bankruptcy. This law stops the attempts by creditors to sue or to apply liens to property owned by military personnel. This act also offers protection to anyone who may co-sign or otherwise share a debt with someone who is in the military. This benefit can help people avoid bankruptcy. There are three main ways it can help.

  1. Creditors are prevented from filing a default judgment against the debtor.
  2. The creditor must give notice to military members about their accounts.
  3. The act can help stop or reverse judgments as well as wage garnishments against military personnel. In some cases, this can even stop property owners from evicting military personnel.

In many ways, these three aspects of the law help to protect ex-military and active duty military personnel to get out of the debts they may owe. While there are many restrictions, it is important to note that it is best to use the services of an attorney to ensure that proper results occur.

Filing Bankruptcy

In some situations, it may still be in the best interest of the ex-military individual to file bankruptcy. If this is the case, all of the allowances that apply to individual citizens filing bankruptcy also apply to the ex-military individual.

Obtain Legal Advice

With many individuals able to avoid bankruptcy using the SCRA, it is important to consult with an attorney prior to filing bankruptcy outright. An attorney can provide advice, information and represent you throughout the bankruptcy filing, which is reassurance your case will be processed properly.