Guarding Against Bankruptcy For Indiana Guardsmen

Admin January-10-2010 No Comments »

I read a lot, everything from professional journals on law, financial planning, tax, employee benefits, and education – all with an eye to providing the most up-to-date Indiana bankruptcy information and advice to my Indiana clients and blog readers. A couple of weeks ago, I read an article in the Chicago Tribune that touched on two subjects close to my heart – service members and job markets. The story highlighted Illinois guardsmen returning from duty and having difficulties getting back into the job market.

For the past twenty years and more, I’ve been offering Indiana bankruptcy help, as well as help with small business bankruptcy in Indiana. Over the years, I often had to help servicemen and women deal with payday loan debt help.

Fortunately, in 2007, new laws were passed making it illegal for creditors to grant high-interest payday loans and car title loans to members of the military.

In several ways, our bankruptcy laws in Indiana allow for special accommodations for soldiers and veterans, including, of course, guardsmen. Besides preventing service members and their families from being evicted from a home, the interest rates that can be charged on their credit cards is capped, and all legal proceedings against them are postponed.

One of the most important concessions offered to military personnel has to do with the bankruptcy means test. Generally speaking, people who earn more than their state’s median income (as measured by family size and Census Bureau Median Family Income numbers), do not have a choice of filing either Chapter 7 or Chapter 13 bankruptcy. The bankruptcy means test is adjusted, though, for both active military and needy vets, including guardsmen, so that they are allowed to have more income and still have the choice of filing Chapter 7 bankruptcy.

“According to the law,” explains Chicago Tribune writer James Janega, “members of the guard and reserves who return to work from active duty are entitled to be treated as if they had never left. If their job still exists, they are supposed to get it back.” That means, he goes on to clarify, that if others with the same job description have been let go, the returning guard members may be out of luck.

“I’m pretty worried about it”, said one guardsman. “If I get released from orders and the checks stop coming in, the bills don’t.” That’s where the Indiana bankruptcy safety net might need to go on active duty!

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