Just because you may be in the military does not mean that you don't have the same right to bankruptcy as other civilians do. Military members are able to file for Chapter 7 or Chapter 13 bankruptcy, but should be warned that there are some instances where filing for bankruptcy can affect your security clearance level.

What differences are there when filing as a servicemember?

While the military does take steps to provide you with a decent standard of living, there is no guarantee that you are protected from all financial hardships. Being away from home can accrue costs that may not have occurred if you were there. While filing for bankruptcy is a public scenario, it can be to your best choice to help you maintain a strong financial situation.

However, being in the military means that you may be subjected to additional rules that civilians do not have to follow in order to protect national security, such as being asked:

• If you have ever had an account delinquent beyond 180 days
• If you have ever been subjected to wage garnishment
• What judgments have ever been held against you

Conversely, military members have some benefits that civilians do not when filing for bankruptcy. The Servicemembers' Civil Relief Act, for example, allows the court to postpone proceedings taken against military members on active duty. In addition, disabled veterans are exempt from the Chapter 7 means test, and some reservists and National Guard Members may be excluded as well. Means testing is meant to disqualify those Chapter 7 filings whose debtors have enough money to pay back a portion of their debts.

Since many high-level positions require an extensive background check, bankruptcy can prevent someone from working in these roles. This does not mean that bankruptcy is guaranteed to affect your employment prospects. Filing for bankruptcy may been seen as a positive step to maintain financial responsibility.