Serving in our military is an amazingly honorable and selfless thing to do. Unfortunately, your sacrifice and commitment to our country can sometimes be a source of financial difficulties. This is especially true when personnel are serving overseas and can not provide for their families in the manner in which they are used causing economic strain. If you are in the military, you have the same right to file for bankruptcy relief as a civilian. In fact, active-duty military personnel and disabled veterans enjoy certain benefits over non-military bankruptcy debtors.However, filing for bankruptcy also has the potential to affect your security clearance under certain circumstances.
Military personnel are not immune from financial hardships or simple accidents which result in financial difficulties. While serving far away from home, it is not uncommon to see military personnel experiencing financial hardship associated with their situation. There may be costs at home that are incurred such as home maintenance, day care or credit card debt that would not normally be incurred if both parents were at home. Many military personnel fear that damage to their reputation or embarrassment may result if they petition for bankruptcy, but just like regular civilians, bankruptcy might be a good option for allowing them to get back on their feet financially.
For military officials that are high ranking and allowed to see classified material, there is a caveat. Bankruptcy can have a negative impact on individual’s ability to work in these positions due to extensive background checks and security clearances. Be sure to discuss this with your attorney before filing. It is always best to know what career impact this filing may have for the future.
In recent years, laws have been passed that offer special rights to military personnel who are experiencing financial hardship. This law, called the Servicemember’s Civil Relief Act, offer special protections when filing for either Chapter 13 or Chapter 7 bankruptcy. These laws are put in place to help active military personnel members to focus on their duties, rather than their financial situation. This act provides active-duty military members many legal protections in civil actions initiated against them. In fact, the SCRA gives courts the right to stay or postpone both bankruptcy and non-bankruptcy proceedings against military personnel while on active duty. Further, the protections afforded by the SCRA are separate from and in addition to the automatic stay provided by bankruptcy.
To learn more about the protections of the Servicemembers Civil Relief Act read more.