Bankruptcy and Members of the Military
If you are a member of the U.S. armed forces, a reservist, or member of the National Guard, you can file for bankruptcy just like any civilian. However, Congress has provided some special rules for servicemembers filing for bankruptcy. For example, disabled veterans and certain reservists and members of the National Guard are exempt from the bankruptcy means test (that's the test that keeps higher income earners from filing for Chapter 7 bankruptcy). And the Servicemembers Civil Relief Act gives bankruptcy courts the power to stay or postpone bankruptcy proceedings while you are on active duty.
If you are in the military or plan to become a servicemember, however, you should carefully weight the effect bankruptcy will have on your enlistment and security clearance. In many cases, it won't matter -- but it could.
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Bankruptcy for Military Personnel
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.
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Will Bankruptcy Affect My Military Security Clearance?
In general, filing for bankruptcy relief will not automatically prohibit you from obtaining a security clearance. But being financially irresponsible can jeopardize your security clearance. This means that whether your bankruptcy will affect your security clearance typically depends on the circumstances
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Legal Protections for America's Military: The Servicemembers' Civil Relief Act
Active service members can take steps to reduce loan obligations,prevent court judgments, and avoid eviction and foreclosure.
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