Procedure to file for bankruptcy for the military
If you are a member of the armed forces and even you are palnning to file for bankruptcy then this article can help you in this process. As the life style of a military person is different from that of a civilian so is the procedure to file for bankruptcy.
As per the title 11 of the United State Code, a court procedure is involved in filing for bankruptcy. Chapter 7 and Chapter 13 are most common kind to the people who file for bankruptcy.
Liquidation bankruptcy is better known as the Chapter 7 Bankruptcy. In this kind of bankruptcy the filer has to surrender all his taxable assets to the court. Then the court appoints a trusty who sells the property of the filer and disburse the money among the creditors. You can save your home, car and retirement account under Chapter 7 Bankruptcy.
A person belonging from the military background gets more advantage compared to a civilian. A military person might not require to go through a Means Test but a civilian has to qualify for it. According to the IRS and the recent census they have marked an average income that is known as median income. A person is only eligible for filing bankruptcy if his income is less than the median income for his respective state. This is basically an income test which is known as the Means Test.
In 2005 bankruptcy code has been revised where the military members has not been subjected to the means test that has been essential to qualify for filing bankruptcy. The members of military has a special Act, that is the Service member Civil Relief Act (SCRA). This act protects the service member’s right as he can file for bankruptcy relief and can still be assigned to active duty outside the US.
As per this special Act, any civil case can be delayed to another date keeping in mind the service member’s interests. This act helps to provide relief while they are in financial doldrums which forces them to file for bankruptcy so that they can focus on their duty towards the country.
When they file for bankruptcy along with the protection of SCRA the service members also get an automatic stay order. While the military person is on duty the creditor has no other option left in hand.
The active service members who have been discharged from their duty after 90days can also get protection under SCRA. Inductees and reservists who have received orders to join the duty but have not joined can also reap the benefit of the protection of SCRA.