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Iowa Bankruptcy Lawyer Says Active Duty Military May File Bankruptcy

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Bankruptcy lawyers are often asked if active duty military may file for bankruptcy. The answer is yes.

There are a lot of people who believe that active duty military personnel are not allowed to file for bankruptcy relief. “While military personnel are held to a higher standard of conduct than regular citizens, they do not have to give up the right to declare bankruptcy,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.

Even dedicated military personnel may run out of money before they have come to the end of the month, and if this continues for a sustained period of time, the individual may need to consider filing for bankruptcy protection. It does not matter if they are in the military at the time they file, and it does not matter what Chapter of bankruptcy they elect to file. They have the same rights as all U.S. citizens when it comes to declaring bankruptcy.

Filing for bankruptcy while on active duty may have other consequences for members of the Armed Forces, such as a negative effect on security clearance and promotions. However, they are still entitled to file and have legal protection accorded to them if their duties get in the way of attending bankruptcy court hearings.

To file for bankruptcy, the service member needs to determine the appropriate state in which to file their petitoin. Federal law mandates they file their bankruptcy in the state where they have lived for the greater part of the six months prior to filing. “Since military personnel are frequently transferred, they need to check the bankruptcy filing requirements of where they currently live,” said Ahrenholz.

Military personnel must also get credit counseling within the six month period before they file, and the Department of Justice has a list of counselors on its website. While the counselors do not get involved with the bankruptcy case, they will outline the process and answer any questions. The next step is to determine which Chapter to file. The choices for personal bankruptcy are either Chapter 7 or Chapter 13. The Chapter is dependent on the size of the debtor’s household and whether his or her income falls above or below the median average income for that size of household in his or her state of residency.

Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact him, visit http://www.iowachapter7.com or call 1.877.888.1766.

Posted on Tuesday, August 28th, 2012 and filed under News and Press.
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