Military personnel have the same rights as anyone else when it comes to filing for bankruptcy. The big difference is that that those that are still in active duty as well as veterans have some benefits that others don’t in regards to their Dayton bankruptcy. One of the drawbacks however, is that in some situations a bankruptcy can affect a military person’s security clearance.
To begin with there is the Service Member’s Civil Relief Act which affords some forms of legal protection in regards to civil actions towards active duty military members. This act can allow the courts to evoke a stay or postpone bankruptcy proceedings regarding a military member during the time they are on active duty. This is over and above the automatic stay that comes with bankruptcies.
Disabled veterans do not have to comply with the means test that is part of the criteria for a Chapter 7 bankruptcy. This only applies to the debts that were incurred while on active duty. There are specific criteria that the disabled vet has to meet in order to be excluded from the means test.
Any military personnel that is considering bankruptcy should consult with an experienced bankruptcy attorney to find out what they qualify for, and any special benefits that may be afforded to them. When coming to the decision to go bankrupt it should be an informed decision and this applies to both military personnel as well as regular citizens.