How to File Bankruptcy While in the Military
- 1). Determine the state in which you can file bankruptcy. Federal law requires that you file in the state in which you've lived for the greater part of the previous six months, according to the Bankruptcy Law Network. If the Air Force transferred you from California to Florida, for example, you can file in California or wait until you've been in Florida for more than three months and file in Florida.
- 2). Receive credit counseling within six months before you file. The government requires that you undergo credit counseling, and the U.S. Department of Justice maintains a list of approved counselors on its website. The website for Hurlburt Field in Florida recommends that you discuss your situation with a legal assistance officer. Officers can't help directly with your case, but they can explain the bankruptcy process and answer any specific questions you have.
- 3). Calculate whether you qualify for either Chapter 7 or Chapter 13, which are the two forms of personal bankruptcy. To qualify for Chapter 7, the U.S. Courts website states, your income for the six months before you file must be below the median for your state. For Chapter 13, your debts must be below the federal limit--in 2010, the limit was $1.08 million--and you must have enough money to make a repayment plan worthwhile for your creditors.
- 4). Determine which chapter best suits your situation. In Chapter 13, the U.S. Courts website states, you spend three or five years using your disposable income to pay off your debts, after which many of your remaining debts will be wiped out. In Chapter 7, the court can sell off your assets and possessions to pay your creditors before wiping out your debts. However, each state exempts some property from being sold in Chapter 7. Florida, for example, exempts your home regardless of its worth. If you have non-exempt assets you want to keep, Chapter 13 might be the better alternative, if you qualify.
- 5). Download forms from the U.S. Courts website. Use the website's court locator to find the bankrutpcy court for your district. File the papers, along with a court fee and a detailed report of your financial situation, at the appropriate U.S. district court.
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