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Being a member of the military doesn’t protect you from facing the financial difficulties that can lead to bankruptcy. Military members have some additional protections that are not available to civilians, but it is still advisable to always allow a bankruptcy attorney to help you through the process of filing. If you’re in the military and wondering how a bankruptcy might affect you, here is what you need to know.


Active duty military members are eligible for additional stays.

Everyone who files for bankruptcy gets an automatic stay from the court at the time of his or her filing. However, active duty military members get additional protections under the Servicemembers’ Civil Relief Act, or SCRA. Under the SCRA, the courts can delay all bankruptcy proceedings until the person filing returns from active duty. This allows military members to deal with their debts when they return from service without penalty.


Some military members are exempt from means testing.

A central part of filing for Chapter 7 bankruptcy for civilians is means testing. This test determines if the person filing has disposable income he or she could be paying to creditors before their debts are dismissed. Veterans who are disability rated at 30% or greater are exempt from means testing. People in the National Guard and Reserves are exempt from means testing when on duty and for 540 days after duty.


Bankruptcy can affect security clearance.

One reason that military members should consult with a bankruptcy attorney before filing is that a bankruptcy can impact security clearance. A bankruptcy alone will not interfere with security clearance, but it may be considered when clearance decisions are made as one of several factors.


Don’t file for bankruptcy alone. Let the experienced bankruptcy attorneys in Aurora and Schaumburg at Cutler & Associates, Ltd. help. Talk to an attorney today by calling (847) 961-4572.