- Myth: You will be kicked out of the military if you file for bankruptcy. Truth: This is a common misconception. You cannot be discharged from the military simply for filing for bankruptcy. The military does not have the authority to do so. However, certain types of debts, such as child support, can lead to a dishonorable discharge if not paid.
- Myth: You can’t get certain types of loans if you file for bankruptcy. Truth: This is not true. While it is true that filing for bankruptcy can hurt your credit score, it does not mean that you are unable to get certain types of loans. In fact, it is possible to get a loan while in bankruptcy.
- Myth: You can’t get a security clearance if you file for bankruptcy. Truth: This is not true. Filing for bankruptcy does not automatically disqualify you from getting a security clearance. However, your financial situation will be taken into consideration when your clearance is being reviewed.
- Myth: You can’t keep your home if you file for bankruptcy. Truth: This is not true. Depending on your situation, you may be able to keep your home
Will I Will Lose My Security Clearance
This is a common misconception about filing for bankruptcy in Texas. It is not true. Filing for bankruptcy does not automatically result in the loss of a security clearance. The clearance will only be affected if the bankruptcy is due to financial mismanagement or other factors that would suggest a lack of responsibility or a tendency to be reckless with finances.
Will I Pass the Means Test?
No, you do not have to pass the means test in order to file for bankruptcy in Texas. The means test is only required for certain types of consumer bankruptcy, such as Chapters 7 and 13. If you are filing a military-related bankruptcy in Texas, you are not required to pass the means test. However, you may still need to meet certain requirements in order to be eligible for military bankruptcy. For example, you may need to provide documentation that you are actively serving in the military and have a valid military ID. Additionally, you may need to show proof of financial hardship.
Will I Lose All My Property
No. in Texas, your property is protected by state law, called the Texas homestead exemption. This law allows you to keep some of your property, even if you file for bankruptcy. The amount of property you can keep depends on your particular circumstances, but the law allows you to keep up to $60,000 in equity in your home, $30,000 in equity in your car, and other personal property up to certain limits.
Bankruptcy Won’t Cover Medical Debt
This is a common misperception. Medical debt is typically covered in bankruptcy, regardless of whether the medical provider is a military provider or not. Medical bills are discharged just like any other debt. The only exception is if the medical provider was a military hospital or clinic, then the debt may still remain after the bankruptcy filing.
- Bankruptcy is the same in every state: False. Bankruptcy laws vary from state to state and can be complicated. In Texas, there are special rules for military members who wish to file for bankruptcy.
- Bankruptcy will ruin your credit for life: False. Bankruptcy does remain on your credit report for up to 10 years, but it does not have to remain a long-term impact. Depending on your financial situation, you may be able to rebuild your credit score relatively quickly.
- Bankruptcy will discharge all debts: False. Bankruptcy will only discharge certain types of debts, such as credit card debt. Other types of debt, like student loans and child support, cannot be discharged in bankruptcy.
- Filing for bankruptcy is a sign of failure: False. Bankruptcy can be a sign of financial hardship, but it can also be a way to help people get a fresh start and regain control of their finances.
- Bankruptcy will stop all debt collectors: False. While filing for bankruptcy can stop some debt collectors from contacting you, it will not stop all of them. It is important to understand your rights and take steps to protect yourself.
