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Military families face a unique set of financial challenges, such as frequent relocations, deployment-related disruptions, fluctuating income, and benefit structures that don’t always align with civilian systems. If you’re stationed in Central Florida and considering bankruptcy, it’s important to understand how military benefits and obligations can impact your case. In this article, we’ll navigate…
In bankruptcy, military stipends usually count as income, especially when calculating expenses for a repayment plan like Chapter 13. Even if certain allowances don’t factor into the means test that determines Chapter 7 eligibility, they still appear on Schedule I (the part of the bankruptcy paperwork where all regular income is listed).
Here’s where it can get tricky: if the military is covering your rent or living expenses, that means you technically have more disposable income left over each month. Even if your salary isn’t high, the court may look at your overall financial picture and determine that you can afford to repay something, which pushes you toward Chapter 13.
So while these stipends aren’t necessarily bad, they can make it more difficult to qualify for Chapter 7. That’s why it’s so important to tell your attorney early about any military stipends or benefits. It may affect how your case is filed and whether you’re eligible for a full discharge or a repayment plan.
Yes. Joint debts are still joint debts, even if one spouse is deployed. If both spouses are filing for bankruptcy, deployment doesn’t change their legal right to file. As long as the deployed spouse is a U.S. citizen, they’re entitled to the same bankruptcy protections.
Today, since most bankruptcy meetings are conducted via Zoom, participation from remote or overseas locations is easier than it used to be. If only one spouse files, the non-filing spouse will still be responsible for any joint debts, just like in any other situation.
Permanent Change of Station (PCS) moves often come with unexpected out-of-pocket costs like plane tickets, hotels, rental trucks, and more. If those expenses were charged to a credit card, they’re generally dischargeable in bankruptcy. Here’s what to keep in mind: If you rack up $10,000 in expenses and file bankruptcy immediately afterward, it could raise red flags. You’ll typically need to wait at least 90 days after those charges to avoid issues with fraud claims.
Further, military-specific debts, such as those owed directly to the government or a military branch, might be different. While many debts (including military exchange store cards) are dischargeable, certain administrative or disciplinary debts could carry consequences beyond bankruptcy, especially within the military system.
So, yes, credit card debt from PCS expenses can be wiped out, but it’s best to consult an attorney if any of those charges are tied to military-specific entities.
Alec Solomita of Solomita Law, PLLC has spent years helping military families in Central Florida navigate bankruptcy with clarity and care.
From dealing with PCS-related debt to understanding how military stipends and pensions impact Chapter 7 or Chapter 13 eligibility, Alec Solomita offers tailored legal solutions grounded in experience. He’s worked with both active-duty and retired service members, including those facing deployment or security clearance concerns.
If your family is feeling the financial strain of military life, contact Solomita Law, PLLC today to explore a bankruptcy plan that fits your mission and protects your future.
It’s unlikely, but certain logistics or security clearance issues could make things more complicated. The only required appearance in most bankruptcy cases is the meeting of creditors, and those are now done via Zoom, making it easier to schedule around deployments. However, you still need to be available and prepared to attend.
In terms of military status or deployment orders, the bankruptcy itself shouldn’t interfere. But if you hold a security clearance or a sensitive position, you should consult your chain of command. I’ve had clients who needed to provide documentation to confirm that filing for bankruptcy wouldn’t jeopardize their roles.
For some, bankruptcy is actually seen as a positive step toward regaining financial stability, which is far more preferable to carrying unresolved, high-risk debt.
Generally, military pensions and Thrift Savings Plan (TSP) accounts are exempt in Florida bankruptcy cases, as long as they’re held in proper retirement accounts. If those funds are sitting in a separate account and haven’t been withdrawn as cash, they’re protected under both state and federal exemptions.
Once you begin receiving monthly payments, however, they may be counted as income, which can influence whether you qualify for Chapter 7. But in terms of asset protection, both pensions and TSPs are safe when structured correctly.
A few factors can complicate things for military families:
Bankruptcy can affect your clearance status depending on your role and branch. If this applies to you, check with a superior or legal advisor on base before filing.
Stipends like BAH can make it appear that your household has more leftover income than it really does. This can push you into a Chapter 13 repayment plan, even if your spending is responsible.
Communication and document collection can be harder with a spouse deployed or relocating, which can delay the case or increase the chance of mistakes.
Many military families hesitate to file because they feel it reflects poorly on them. But the reality is: bankruptcy exists for a reason, and using it to create a clean financial slate can protect not just your credit, but your service eligibility in the long term.
Most military families I’ve worked with don’t have extravagant spending habits. They’re just trying to do the right thing with the resources they’ve got. Ironically, that often puts them in a position where they look “too solvent” for Chapter 7, even when they’re struggling behind the scenes.
For more information on military family bankruptcy in Orange County, FL, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 300-1082 today.
Alec Solomita of Solomita Law, PLLC has spent years helping military families in Central Florida navigate bankruptcy with clarity and care.
From dealing with PCS-related debt to understanding how military stipends and pensions impact Chapter 7 or Chapter 13 eligibility, Alec Solomita offers tailored legal solutions grounded in experience. He’s worked with both active-duty and retired service members, including those facing deployment or security clearance concerns.
If your family is feeling the financial strain of military life, contact Solomita Law, PLLC today to explore a bankruptcy plan that fits your mission and protects your future.
