How the Site Works: Ascend's mission is to take the pain out of personal finance for everyone. Not everyone who comes to our site is currently best fit for the Ascend product, so we spend a great deal of time and effort finding partners that we hope will be beneficial to you.
How We Make Money: Our partners sometimes compensate us in the way of advertising. Some partners we recommend pay us referral fees for sending them new customers. If you click through an application link on our site and end up receiving the service, we may receive compensation when your application is approved, and you move forward with this product. Each partner is vetted based on the following criteria:
If you're a veteran reading this, first off, thank you for your service. Choosing to serve takes courage, and that is not something I take lightly.
I also know that financial hardship can hit anyone, including veterans. Unfortunately, an unexpected event can cause a financial crisis that you cannot recover from without the help of the bankruptcy system. The good news is that veterans may have certain protections in bankruptcy that others do not.
Here are five things I think very veteran should know before filing.
The Chapter 7 Means Test is what determines whether you qualify based on income.
A bankruptcy discharge means you're no longer legally required to repay those debts. In other words, creditors cannot take any action to collect a debt discharged through bankruptcy.
If you're unsure whether you qualify, you can use our free Chapter 7 bankruptcy calculator (below) to get a rough idea of your eligibility and potential costs.
Most of your debts were incurred while you were on active duty or performing homeland defense activities.
You were called to active duty or performed a homeland defense activity for at least 90 days. If so, you are excused from the Means Test for those 90 days and 540 days after that.
In some cases, you may still need to complete the Means Test depending on the timing and specifics of your case.
If you file under Chapter 7 and your debts are primarily non-consumer debts, you are exempt from taking the Means Test. “Primarily” generally means more than 50 percent of a person’s debts.
Non-consumer debts are generally debts incurred in the ordinary course of business. Self-employed veterans must be careful. If they used the services or goods purchased for their business for personal use, they should consult a bankruptcy lawyer before assuming they are exempt from the Means Test.
If you believe that you are exempt from the Chapter 7 Means Test, you must file Bankruptcy Form 122A-1Supp. However, it is wise to consult a bankruptcy lawyer to confirm that you qualify for the exemption before filing a Chapter 7 bankruptcy case.
Many veterans wonder whether the VA or other veteran organizations can help if they're facing bankruptcy. While they may not directly provide financial assistance or legal services for bankruptcy proceedings, they offer various resources and programs aimed at preventing financial crises and assisting veterans in navigating the complexities of bankruptcy.
While the VA typically doesn't handle bankruptcies directly, they may offer financial counseling or connect you with helpful resources. Many organizations offer workshops, seminars, and one-on-one counseling sessions to help veterans manage their finances effectively, budget wisely, and make informed decisions about their financial future. By empowering veterans with financial literacy skills, these associations aim to prevent bankruptcy and other financial hardships.
The VA may collaborate with legal aid organizations or refer veterans to pro bono legal services for bankruptcy cases. While they may not offer legal representation themselves, they can connect veterans with professionals who specialize in bankruptcy law and understand the unique challenges veterans may face.
Veterans associations often provide support networks and peer-to-peer assistance. Veterans who are struggling financially can find solace and practical advice from fellow veterans who have overcome similar challenges or who can offer guidance based on their experiences.
Overall, while veterans associations may not directly handle bankruptcies, they offer invaluable support through financial education, referrals to legal services, and peer support networks, all of which can be instrumental in helping veterans navigate financial difficulties.
The Haven Act (“Honoring American Veterans in Extreme Need”) was signed into law on August 23, 2019. The Act provides additional protections for disabled military veterans in bankruptcy proceedings. In simple terms, it protects certain military disability benefits from being counted in the bankruptcy income calculation.
The Act excludes benefits paid to disabled veterans and their families from the Means Test. Benefits protected under the Haven Act include, but might not be limited to:
The U.S. Department of Justice answers frequently asked questions about the Haven Act.
Even with these protections, not all income is excluded.
If you are an active member of the military service, your income is included in the Means Test. Furthermore, some benefits paid to current servicemembers are included in the Means Test, such as retirement pay for individuals on the temporary disability retired list. Additionally, monthly special compensation from the Department of Defense is included in the Means Test.
Veterans and active service members may be able to access elgal help through U.S. Armed Forces Legal Assistance program. The Department of Veterans Affairs also lists several resources for veterans seeking legal assistance.
However, active service members, veterans, and disabled veterans can receive free bankruptcy advice by scheduling a free consultation with a Chapter 7 bankruptcy lawyer.
Many veterans worry about purchasing a home after filing bankruptcy. They worry that they cannot qualify for a VA mortgage with a bankruptcy on their record. The good news? Filling for bankruptcy does not automatically disqualify you from a VA loan.
In many cases, veterans can qualify for a VA loan about two years after a Chapter 7 discharge, assuming other mortgage requirements are met. This is something that many veterans don't realize!
The key takeaway is that if you're a veteran considering bankruptcy, getting experienced advice can help you protect our income and assets. We can also help connect you with a bankruptcy attorney in your area for a free consultation. Most bankruptcy attorneys offer free bankruptcy consultations, so seeking advice does not cost you anything.
Yes
No