Aspects To Consider When Filing Bankruptcy As a Military Member
Filing bankruptcy is stressful and confusing, especially if you are a military member. If you are not sure if you can file it or not, then we are here to help. This blog will encompass all the information needed to answer that question and many more (including if you need a Gilbert bankruptcy attorney or not) so read on to find out!
All About Chapter 7 And Means Test Exemption
The “means test” is a requirement for filing bankruptcy in the U.S.
It involves calculating your income and expenses to determine whether you qualify for Chapter 7 bankruptcy. If your income is too high, you will have to file under Chapter 13 instead of Chapter 7.
However, military members may be able to exempt themselves from this process. If you are a disabled veteran or a member of the National Guard or Reservist, you may be exempt from passing the means test. But, you have to meet certain conditions.
Disabled Veteran Exemption
If you are a disabled veteran, then you don’t have to pass the means test if you got debts during these periods:
- while performing activities regarding homeland defense, or
- during active duty
To pass on the means test, you must have a qualifying disability, which means:
- Your disability is 30% or more under the Secretary’s disability compensation rules.
- You were released from active duty because you aggravated your disability while on duty.
What Are The Limits and Exclusions in Active Duty?
A Gilbert bankruptcy law office is the best place to understand better the limits in active duty. What we can say is that not all disabled veterans who were injured during duty qualify for this exception.
Keep in mind that “active duty” means “full-time” military service (including attendance and training at military schools).
Only full-time National Guard duty is excluded from this term. However, you may still be entitled to the means test if you are in the National Guard (it depends on certain conditions).
If you are a member of the National Guard or a reservist, you might qualify for the means test exception, but only if:
- You participated in homeland defense activities for at least 90 days (with a continuous period)
- You are filing bankruptcy 18 months after leaving active duty.
Exempt Assets for Veterans
Your benefits as a veteran may be exempt assets when you file for bankruptcy. However, if you live in a state with a federal bankruptcy exemption system, and you use the federal exemptions, then your benefits are exempt.
In other words, your state’s exemption laws may cover your veteran’s benefits too.
This is a delicate topic though, so you should not file for bankruptcy by yourself. Contact a Gilbert bankruptcy lawyer to get better help.
What Is The Servicemembers Civil Relief Act (SCRA)?
The Servicemembers Civil Relief Act of 2003 (SCRA) is a federal law in the U.S. that protects military members from debt collection circumstances. This law postpones and prevents:
- Debt collection default orders.
- Bank attachments.
- Evictions and wage garnishment.
The SCRA is mostly beneficial in non-bankruptcy situations, but it can also help you while in bankruptcy. This federal law can stop or delay contested or adversarial proceedings in bankruptcy for up to 90 days. This is viable after you leave active duty service, and it includes:
- Objections to discharge.
- Trustee actions regarding your property.
- Default complaints to choose discharge ability.
- Debtor’s examinations.
- Collection actions.
What Are The Bankruptcy Circumstances That Can Hurt My Military Application
Filing for bankruptcy per sé won’t prevent you from joining the military, but you still have to meet certain financial requirements to enlist.
Consider these potentially damaging bankruptcy issues before enlisting, as they can hurt your military application:
- Filing for bankruptcy many times.
- Discharging taxes and gambling debts.
- Having a dismissed case (by the court).
- Relapsing into bad financial situations after filing for bankruptcy,
When Should I Meet With A Gilbert Bankruptcy Lawyer?
In conclusion, military members do not file for bankruptcy the same as civilians. Military members have some differences in certain conditions, but it’s still important to contact a bankruptcy lawyer before continuing with the process.
At Gilbert Bankruptcy Lawyer we can help you out with your financial situation. Our attorneys can guide you through the legal process and help you file your case and become debt-free without much hassle! Contact our team today to get a free case evaluation.