In The Military? 4 Things You Need To Know About Bankruptcy

If you're in the military and you've fallen on difficult financial times, you might be wondering about your bankruptcy options. Bankruptcy can be a confusing topic, especially for members of the military. Many service members who fall on hard financial times wonder how bankruptcy will affect them. If you're one of those individuals, the information provided below can help. Here are four things you might not know about bankruptcy and how it affects you as a member of the armed forces. 

You Are Entitled to Bankruptcy Protection

If you've fallen deeply in debt and you can't find any way out, you might have considered bankruptcy. If you're like many members of the US armed forces, you might not think you're eligible for bankruptcy protection. But that's not the case. Your status in the military has no bearing on your eligibility to file for bankruptcy protection. If you're a member of the military and you've fallen behind on your bills, bankruptcy can give you the fresh start you need. 

Your Security Clearance May Be Affected

If you're active duty military and you have a security clearance, filing for bankruptcy may affect that status. This is especially true if your debt was incurred due to extravagant spending habits or gambling. But if you've gone into debt through no fault of your own and you're still in good standing with your supervisors, filing for bankruptcy may actually help you maintain your security clearance. That's because you're taking action to clear up your debt. 

You Might Be Exempt From the Means Test

If you're no longer active duty but you've been discharged with a service-connected disability, you might be exempt from the bankruptcy means test. The means test is the government's way of ensuring that you meet the basic income requirements for bankruptcy protection. Most people need to meet the means test before they can file for bankruptcy. This includes most active duty members of the armed forces. However, if you're a disabled veteran and you incurred the bulk of your debt while on active duty, you will not need to pass the means test. 

You Will Need to Seek Legal Assistance

Finally, if you're a member of the military and bankruptcy is your only way out of the debt you're facing, you need to speak to a bankruptcy attorney as soon as possible. An attorney can answer any questions you might have regarding bankruptcy and your status in the military. They can also make sure that your paperwork is filled out properly.