Serving your country in the military does not make you immune the same financial stresses found in the civilian population.
Military service, which may require frequent moves and frequent loss of income as spouses are forced to leave behind their careers and move to new deployment locations, can have a seriously detrimental effect on an individual or a family’s financial health.
When this happens, bankruptcy may be your only option to improve your financial situation.
Members of the military have the same basic rights for bankruptcy protection as civilians and follow basically the same profess.
However, there are a few significant advantages that military service may give you.
The Service Members’ Civil Relief Act (SCRA) recognizes that active-duty or deployed service members may not be able to respond in a timely manner to bankruptcy, foreclosure or other civil proceedings. The SCRA gives courts the authority to postpone such actions until the service member has completed their deployment or related duty and can adequately respond to the action.
This postponement process is separate from and can be far greater than the time limits normally offered civilians under the automatic stay they are granted upon filing bankruptcy. The SCRA carries a number of additional benefits, including a stay of a default judgements, a stay or vacation of any wage or salary garnishments, and, in most cases, forbids the eviction of a service member or their dependents from the primary residence without a court order.
Service members should be aware, however, that declaring bankruptcy may negatively impact their security clearance. For that reason, you may want to check with your command to see what impact bankruptcy may have on your clearance level.
However, bankruptcy does not carry the negative career impact that it once had in the military.
While declaring bankruptcy may have once have caused slow career advancement, most commands now recognize bankruptcy as a positive step by service members who are trying to honor their financial responsibilities while serving their country.
Bankruptcy should have little to no negative impact on your military career.
If you are considering bankruptcy, contact us for more information.