What Military Personnel Should Know About Bankruptcy?

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At Sadek Bankruptcy Law Offices, we realize that every situation is different. Our debt relief lawyers will take the time to learn about your situation and your goals. Our objective is to explain your legal options and offer the best debt relief strategy for you in the most compassionate and friendly manner possible. Call 24/7 to schedule your meeting with a lawyer.


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What Military Personnel Should Know About Bankruptcy?

Armed forces personnel, like everyone else, can become overly indebted, resulting from unexpected medical bills, moving costs, or other financial issues. It is possible and legal for military personnel to file for bankruptcy in situations like this. 

Military personnel is allowed by law to file for bankruptcy under Chapter 7 or Chapter 13; you might even gain access to privileges not available to the general public. Contact a bankruptcy attorney for military personnel at Sadek Bankruptcy Law Offices, LLC for a no-obligation consultation. Let’s take a closer look. 

Military Bankruptcy Vs. Civilian Bankruptcy

When civilians file for Chapter 7 bankruptcy, they usually must pass a means test. This is where they give information about their income and other essential facts. The means test differentiates between bankruptcy in the military and bankruptcy in the civilian world. 

Military members on active duty, in the National Guard, or the Reserves may file for Chapter 7 bankruptcy without passing the means test. Some veterans who are disabled may also be able to get this exemption, but they must meet specific requirements. 

Types of Personal Bankruptcy a Bankruptcy Attorney for Military Personnel Deals In

Chapter 7 

You should complete bankruptcies under Chapter 7 in four to five months. While Chapter 7 can eliminate many debts, it cannot eliminate child support, alimony, some taxes, or most student loans. Often, debtors are not required to repay their creditors, and military personnel can use federal and state exemptions to protect their property. 

Wage garnishments, lawsuits, collection letters, and phone calls can be stopped if a service member files for Chapter 7 bankruptcy. Military members can clear their debts with landlords by returning housing waivers to cover unpaid rents. 

From the time it is filed to the time it is completed, Chapter 7 bankruptcy usually takes only a few months. As a result, you can begin rebuilding your credit almost immediately. 

Chapter 13 

A court-appointed trustee must be paid every month in a Chapter 13 bankruptcy. The amount you pay will be determined by how much money you make and your level of debt. Our New Jersey bankruptcy attorney will consider these factors when deciding on your case. The court must also approve the reorganization plan. 

Military personnel can deduct money from their paychecks to pay their trustee payment. You might also want to include your tax refunds. It is much easier to ensure that payments are made on time each month with a garnishment. It’s important to understand that a wage order in bankruptcy is a court order. If you don’t pay on time, the trustee will file a motion with the court to dismiss your case. 

Can You File for Bankruptcy While Serving in The Military?

Even if you are in the military, you can file for bankruptcy. All United States Armed Forces members have the same legal rights as civilians. Military personnel, like the people they protect, face financial difficulties. Nobody is safe. Some military members with financial problems may be hesitant to file for bankruptcy. 

Taking the necessary precautions to protect yourself and your family is not a sign of weakness. Getting your finances in order is preferable to struggling under the weight of debt you can’t pay off. You could eliminate these debts and put yourself in a better financial position if you filed for Chapter 7 bankruptcy. 

How to Take the Means Test?

The first essential step in filing for bankruptcy is to complete a means test. Bankruptcy means the test determines who is eligible to file for Chapter 7 bankruptcy and receive debt relief. It looks at your income, how much you spend, and how many people are in your family to see if you have enough money to pay off your debts. 

People who don’t qualify for Chapter 7 bankruptcy or want to keep certain assets, such as a home or a high-value car, can use Chapter 13 to reorganize and pay off their debts. The means test is divided into two parts, each of which is designed to determine whether you have any extra money that you could use to pay off debt.  

Typically, our reputable bankruptcy attorney for military personnel will complete the form and submit it to the court along with the rest of your paperwork. The means test is only required if you owe most of your debt to credit cards or medical bills. You do not need to take the test if most of your debt is from a business you own. The test is also used in Chapter 13 bankruptcy to determine the repayment plan. 

The means test’s first part determines whether your family’s income is less than the state’s median income. Although the means test is based on the previous six months, changes that have occurred or will occur are considered. Because you passed the means test, you can file for Chapter 7 bankruptcy if your income is less than the median. It’s as simple as that. 

Disposable income is the money left over after paying for necessities and can be used to pay off debt. The other valuation involves the cost of all the allowable expenses in the last six months, such as rent, groceries, clothing, and medical bills. Our bankruptcy attorney for military personnel will work with you to ensure that your expenses are correctly recorded. 

You get a chance to file for Chapter 7 after passing the means test. Most of your unsecured debts will be eliminated due to this, but you might still be able to get Chapter 7 if your disposable income is low. 

You cannot appeal if you fail the means test, but that doesn’t mean. Chapter 13 is your only option if you can wait a while. Remember that the income and expenses you use to complete the means test are based on your financial situation over the previous six months.  

If you believe your situation has changed enough to be eligible for Chapter 7 debt relief, our Philadelphia Military Bankruptcy Lawyers can help you retake the test after six months. 

Chapter 7 Means Test Exemption and Military Members

If a civilians file for Chapter 7 bankruptcy, the government uses a “means test” to determine whether the person is eligible. On the other hand, the means test may not apply to some military personnel who are still serving or disabled veterans. To be exempt from the means test, a member of the military on active duty or a disabled veteran must meet the following criteria: 

Disabled Veterans 

Disabled veterans who received more than half of their current debt while on active duty may be eligible for the means test exemption. They should have a disability rating of at least 30% or have been discharged from active duty because their disability began or worsened while serving in the military.

Active Duty Military 

A military member must serve full-time to be considered “active duty.” Active duty includes full-time military training. 

National Guard 

Suppose a member of the National Guard served on active duty or participated in homeland defense activities for at least 90 days and filed for bankruptcy within 18 months of leaving active duty. In that case, they may be exempt from the means test. 

Why A Bankruptcy Declaration Jeopardizes Your Security Clearance

The Armed Forces think you mishandle money; your military clearance could be in danger. If you are in the military and file for bankruptcy, it shouldn’t change your level of security clearance. But if the U.S.

So, when it comes to bankruptcy and military security clearance, the real question is: why do you have so much debt? If the problem is wasteful spending such as; gambling, illegal and fraudulent financial activity, drug and alcohol abuse, or any other such behavior, you will need to explain yourself to your superiors. These may make your superiors think you are a security risk because you don’t have self-control or good judgment.  

If you went bankrupt because of something else, like a divorce or medical bills, it probably wouldn’t affect your security clearance level. 

Talk to Brad Sadek immediately about your money in Philadelphia, Pennsylvania. In reality, if you have a lot of debt that you haven’t paid off, it could hurt your military clearance level more than a bankruptcy. Our Philadelphia military bankruptcy lawyers will tell you your rights and what you can do. 

How Can Our Philadelphia Military Bankruptcy Lawyers Help?

At Sadek Bankruptcy Law Offices, LLC, a skilled bankruptcy attorney for military personnel can help you in many ways with your bankruptcy case, such as:

  • Taking a close look at your case and thinking about how it is different from others
  • Giving you legal advice about bankruptcy law, other options for bankruptcy, and your legal options for the future
  • Help you understand the various rules and regulations that apply to military bankruptcy
  • Putting together your bankruptcy paperwork and making sure you have everything you need
  • Putting in your bankruptcy petition
  • Helping you in bankruptcy court and being your advisor and advocate
  • Fighting for your rights as a current or former member of the U.S. Armed Forces.

Call Sadek Bankruptcy Law Offices Law Offices today at 215-545-0008

Our Philadelphia military bankruptcy lawyers know how hard and confusing it can be to go bankrupt. Let us help ease some of your stress by walking you through the process and giving you the help you need at this challenging time.

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