Bankruptcy in the Military: Does Filing For Bankruptcy Hurt My Chances? - Westgate Law

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Bankruptcy in the Military: Does Filing For Bankruptcy Hurt My Chances?

is not unheard of – filing for bankruptcy will not preclude your enlistment, but negative financial circumstances could do it. To join the military, certain financial standards have to be met. A bankruptcy in your past will not prevent you from joining on its own, but the circumstances that led to or that lie underneath your bankruptcy could cause the military to view you as undesirable. But the reverse is also true…in some situations; filing for bankruptcy could actually improve your chances of being accepted into the military and having a successful military career.

Why the Military Cares About Your Finances:

The military wants to see proof in your financial background that you are responsible, trustworthy and reliable. They believe that your financial background is a strong indicator of whether or not you have these desired personality traits. It is also a good indicator of whether or not you are capable of living on a military salary. The Department of Defense officially requires that all members of the military “pay their just financial obligations in a proper and timely manner.” Each branch of the military has its own recruitment criteria regarding financial background information. In addition, credit history and financial background information will continue to be taken into consideration throughout your military career as a continued indicator of personal characteristics when you are considered for promotion.

What Types of Financial Situations the Military is on the Lookout For:

There are certain financial behaviors that the military will view as particularly negative. Some of these behaviors include: bad check writing, repossessions/foreclosures, irresponsible credit card spending, loan fraud, income tax evasion, embezzlement, charge offs, high debt-to-income ratios (or signs that you are living above your means).

How Your Financial Circumstances Related to Your Bankruptcy Could Help or Hurt Your Military Career:

There are specific circumstances that would be viewed as “less-than-honorable” in relation to bankruptcy. These are the circumstances surrounding your bankruptcy that could harm your chances for a successful enlistment or successful promotion within the service. These include: filing for bankruptcy multiple times, discharge of gambling debts, discharge of taxes, discharge of luxury item debts, the dismissal of a bankruptcy, the court denying your discharge, or a relapse into bad financial behavior post-bankruptcy.

The potential severity of the consequence of these financial actions on a career with the military depends upon the type of position you are applying for as well as the potential need for security clearance. Military personnel with security clearance are held to a higher standard as they may be required to protect military intel. High levels of debt or unpaid debt can be seen as indicators that an individual could be susceptible to monetary compensation for military intel.

On the other hand, in some cases, filing for bankruptcy could actually help you to become a stronger applicant for the military. Bankruptcy can enable many people to improve their credit histories more quickly than they could on their own. The years long struggle to pay back debt that you can’t afford amidst delinquencies and negatives reporting to your credit report can take substantially longer than obtaining a discharge of debt through bankruptcy and immediately beginning the credit reparation process. Some see their credit score back at a “good” status within 2 years by immediately building a positive credit history through on time payments and an improved debt-to-income ratio. If declaring bankruptcy helps you to get your finances in order, you could end up a stronger military candidate because of it. Recruiting officers could even view your post-bankruptcy behavior as a good thing as the abrupt about-face of bankruptcy followed by financial rehabilitation shows you are a problem solver and are willing to work towards and capable of self-improvement.

If you are hoping to improve your chances in the military by declaring bankruptcy and developing a healthier financial background, get in touch with the southern California bankruptcy attorneys at Westgate Law. We can help you obtain a discharge of debt and advise you regarding the quickest, most efficient methods of rebuilding your credit post-bankruptcy in order to maximize your chances for enlistment and/or promotion within the military.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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