Special Considerations for Military Members Who Need Bankruptcy
Being in the military is already a demanding job, and dealing with financial struggles can make it even harder. If you’re in the service and dealing with debt, you might be worried about bankruptcy for military personnel.
- How could it affect your career and your future?
- What other options or benefits might you have as a military member?
- And what can you expect from the process?
As a Memphis bankruptcy lawyer and Marine veteran, I’m here to help you make informed decisions to protect both your finances and your career. Let’s explore what you need to know about bankruptcy in the military.
Understanding Your Bankruptcy Options
First, it’s important to know the two main types of personal bankruptcy: Chapter 7 and Chapter 13. Which one you need depends on your unique situation and goals.
Chapter 7 allows you to discharge most of your debts. And Chapter 13 helps protect your assets by setting up a repayment plan to pay back your debts over 3-5 years.
Both options offer a fresh start and are available to everyone who qualifies, including military personnel.
Special Considerations for the Military
1. Security Clearance
One of the biggest concerns for military personnel considering bankruptcy is how it might affect your security clearance.
Financial issues can be seen as a risk factor, but filing for bankruptcy doesn’t automatically disqualify you. In fact, it’s crucial you show you’re taking responsible steps to manage your debt. Remember, it’s much safer to have someone in a leadership position who’s dealt with their finances than someone who’s desperate for money to pay back a list of creditors.
Be honest and upfront with your superiors and the clearance investigators about your situation. They often appreciate transparency and see bankruptcy as a positive step towards resolving your financial issues.
2. Service Members Civil Relief Act (SCRA)
As a military member, you have certain protections under the SCRA. This act can provide you with temporary financial relief, like reduced interest rates on pre-service loans. It also offers some protection from certain legal actions, including foreclosure and eviction.
The SCRA can make your financial situation more manageable while you’re on active duty and give you some additional options to explore.
3. Military-Specific Financial Counseling
Before deciding on bankruptcy, consider speaking with a financial counselor who specializes in helping military personnel. Many military bases offer free financial counseling services.
They can offer guidance tailored to your unique situation, including how to handle deployment, permanent change of station (PCS) moves, and other military-specific financial challenges.
4. Protection of Benefits
Most military benefits, like pensions and VA disability payments, are protected in bankruptcy. This means creditors can’t access these funds to pay off your debts.
But keep in mind, the laws can be complex. You should discuss your specific benefits with a bankruptcy lawyer to understand how they’ll be handled in your case. We offer a free consultation, where we can go over these details with you.
Steps to Take if Considering Bankruptcy
If you’re like most military members, you want to pursue your bankruptcy carefully to protect yourself, your family, and your career. That’s honorable and smart, and there’s a lot you can do to help yourself make the right decision:
1. Assess Your Financial Situation
Take a close look at your debts, income, and expenses. Look at whether you could re-budget or whether you have other obvious ways to manage your debts.
2. Explore All Options
Consider alternatives to bankruptcy, like debt consolidation, negotiation with creditors, or using military-specific programs that provide financial assistance. This is where working with a financial advisor can help significantly.
3. Prepare for the Future
Regardless of whether you decide to file for bankruptcy, it’s important to create a budget and a financial plan for the future. This will help you avoid similar issues down the road and give you the tools to build financial stability.
4. Consult with a Bankruptcy Lawyer
Talk to a lawyer who understands the special considerations for military personnel. As a Marine veteran myself, I can help you understand your options and guide you through the process while taking into account your military service and obligations.
Take Action Today
Dealing with financial difficulties is challenging, but you don’t have to face it alone.
As a bankruptcy lawyer and veteran who understands your experience, I’m here to support you every step of the way. We offer a free consultation, where we can discuss any of your concerns and questions.
Together, we’ll explore your options, protect your career and benefits, and help you achieve financial stability.
Remember, taking control of your financial future is a strong and positive step forward. If you’re a military member considering bankruptcy, contact me today.
Just call 901-327-2100 and ask for Darrell, or fill out the form on this page.