MILITARY BANKRUPTCY MYTHS

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1 MILITARY BANKRUPTCY MYTHS THAT WON T GO AWAY A Bit of Guidance Can Go a Long Way in Turning Your Finances Around Through Bankruptcy So that You Can Better Protect Your Family s Future ERIN B. SHANK CENTRAL TEXAS BANKRUPTCY ATTORNEY 1

2 There is no shortage of potential problems always lurking around the corner for military families. In most marriages, one spouse typically handles the majority of the finances. But what happens in a military family and the spouse who covers those bases is now deployed? Younger newlyweds also have their share of money woes, especially if the couple is separated not long after making their vows. In fact, many have little, if any, time to set up their households before the military spouse is deployed, much less delve too deep into long term expectations for their finances. And then there are the countless military bankruptcy myths that seem to never go away. MILITARY FAMILIES &FINANCIAL PITFALLS "The number one issue deployed service members worry about is how they'll communicate during the deployment about finances, child care, family decisions, etc.," says Dr. Earl Beale, Director of the Family Support Center at Grand Forks Air Force Base in North Dakota. Everything changes and new routines must be found, but for those who are uncomfortable with the financial aspects of running a household and saving for the future, it can be a double whammy as things spiral down in short order. 2

3 The good news is that it doesn t have to be that way. Being able to find accurate information is crucial, especially if a bankruptcy is being considered. It s the confusing advice out there that keeps many in the cycle of worry over their finances. Here are a few of the more common military bankruptcy myths. Once you have the facts, you re already empowered and can move forward with making the best decisions for you and your family. SECURITY CLEARANCES Many are concerned that their security clearances would be put in jeopardy were they to file for bankruptcy protection. They wrongly believe bankruptcy ruins their military career and prevents them from moving up. Nothing could be 3

4 further from the truth. Not only can you restore your security clearance if it s even in jeopardy - but any involuntary allotments are removed as well. In fact, too it s more likely that debt would jeopardize your clearance faster than filing for bankruptcy since it can be viewed as taking a proactive path to rectifying the problem. MEANS TEST Courtesy of the 2005 bankruptcy overhaul laws, a means test was put into place. This is a formula used to determine if someone should file Chapter 7 or Chapter 13 bankruptcy. In nearly every instance, disabled veterans are exempt from the Chapter 7 means test. That said, our office is very familiar with this test and therefore, you shouldn t have any problems filing a bankruptcy or the means test if we file your case. NEW START Filing for bankruptcy isn t an automatic lose everything game changer. The purpose of bankruptcy is, and always has been, to provide a way for Americans to start anew. Many think they ll not only lose their homes and cars, but that they ll be left with very few options moving forward. There are programs in place to help you keep your home while also bringing you current with any payments that are behind. One of those programs, Home Affordable Modification Program, or HAMP, is ideal for those in military, but it s not your only option. You can buy a new car with interest rates that are almost certain to be lower than what you were paying before bankruptcy. The last thing a deployed soldier wants to worry 4

5 about is his or her family that s struggling at home. Bankruptcy can help achieve that piece of mind. MEDICAL DEBT Even after the recent changes in bankruptcy laws, the myth that medical bills can t be discharged in a bankruptcy is just wrong. The vast majority of those who file bankruptcy, military and civilian alike, have medical debt. Bankruptcies don t restrict you from being able to discharge medical debt, credit card debt and more. 5

6 TIMING IS EVERYTHING Another reason some members of our nation s military hesitate is because they re not sure what happens if they re deployed before they can complete the bankruptcy process. Your bankruptcy attorney can help put important protections in place so that it s not a problem or you. Your decision to choose the military as a career shouldn t keep you from the same rights as other Americans. An experienced bankruptcy lawyer can protect your rights even as you re protecting our country. To learn more about military bankruptcy myths and your rights, contact our offices today. A bit of guidance can go a long way in turning your finances around through bankruptcy so that you can better protect your family s future. 6

7 About the Author Erin B. Shank With extensive training and 32 years of experience helping families throughout Central Texas, Erin B. Shank is here to help you conquer your financial obstacles. Whether you need guidance and advice regarding bankruptcy, debt consolidation, tax debt or other financial problems, Erin and her friendly and qualified team can help you find solutions that will enable you to manage or eliminate your debt. Erin B Shank, PC Austin Avenue Waco, TX (254) East Central Texas Expressway Suite 107 Killeen, TX (254)