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Military Service and Bankruptcy

Thank you to all of our serviceman and women! Congress has passed many laws attempting to give veterans a preferred status to meet special needs that result from service to our country. For example, wounded veterans receive health care after discharge and veterans often have hiring preference for jobs.

In recognition of the potential economic hardships that extended military service may impose on our reservists and national guardsmen, Congress has made a special exemption from the bankruptcy means test. Members of the Reserves or National Guard who file bankruptcy while on active duty or within 540 days after from release from active duty are excluded from all forms of means testing. Disable veterans are also exempted from taking the means test. However, the exemption only applies if the indebtedness was primarily incurred during service on active duty or while performing a homeland defense activity.

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