Bankruptcy Attorney in Killeen & Waco Experienced in Representing Active Duty Military Members and Veterans

Comprehensive Debt Relief Services in Central Texas

If you are a soldier or a veteran with financial challenges, you may be wondering whether you qualify for bankruptcy relief and filing a bankruptcy case could effect your military career and your security clearance. .

Fortunately, soldiers and veterans can file for bankruptcy relief just like civilians, and you may even be entitled to certain protections because of your service. When you contact Attorney Erin Baker Shank for a free initial consultation, she can help you review your options and determine what is best for you.

Bankruptcy Guidance for Military Personnel in Central Texas

Bankruptcy is a legal process designed to help individuals seek relief from their overwhelming debt, which is not a problem unique to civilians. According to the National Foundation for Credit Counseling (NFCC), more than 750,000 people file for bankruptcy every year, including roughly 10% of all active-duty military personnel. 

Two of the most common types of bankruptcies for veterans and active-duty personnel are Chapter 7 and Chapter 13 bankruptcies. 

• Chapter 7 is the most popular type because it is relatively quick and straightforward. Under Chapter 7, you keep all of your assets and get discharged from most of your debts (except for child support, student loans and some IRS debt) There is no wage garnishment and your get to keep you income tax refunds. 
• A Chapter 13, on the other hand, is a three to five year wage garnishment. Your income tax refunds are also garnished for that three to five year period. You can not incur debt or buy a replacement vehicle during that entire three to five year time period. You also can not work to restore your credit during this time period because you are actually in an active bankruptcy case for three to five years.  

Impact of Bankruptcy on Military Security Clearance

Will filing a bankruptcy case effect my Security Clearance? This is a question that every active duty soldier asks us at their free initial consultation with this law firm.  

Having unpaid debt is an issue that can effect your Security Clearance. In the eyes of the military, if you owe unpaid debt you are subject to bribery or compromise. In other words, soldiers owning money are under financial strain and therefore could be bribed into revealing military confidences in exchange for money. So, it is the debt, not the bankruptcy, that causes the Security Clearance problem. If you have debt, you could loose or not obtain a Security Clearance which is a prerequisite to advancing in your military career.  

Since the vast majority of cases filed by Erin Baker Shank are Chapter 7 cases, the debts are legally discharged (forgiven) in three months. We have actually filed Chapter 7 cases for soldiers who have had their Security Clearances revoked or denied, who were able to obtain Security Clearances after their Chapter 7 discharge. Security Clearances are granted and then renewed periodically. If you incur debt after you receive your Security Clearance, we can file a Chapter 7 bankruptcy case for you and have you discharge and your case concluded before your next Security Clearance renewal date. You will then be discharged of all of your debt and so your debt will not prohibit you from obtaining a renewal of your Security Clearance.  

If you file a Chapter 13 bankruptcy case, you owe your debt until you make all of your Chapter 13 wage garnishment payments and so you are subject to bribery the entire time you are the subject of your active Chapter 13 case - three to five years. Therefore, we do not file Chapter 13 cases for our clients who are trying to obtain or retain a Military Security Clearance.