Soldiers & Sailors Act
I was recently contacted by a soldier in Iraq asking about Bankruptcy. The problem here is that the Bankruptcy Code requires debtors to appear at a meeting of creditors and if the debtor is unable to appear, the case can be dismissed. Since it is impossible for someone serving overseas to pick up and leave to come back to the USA for a meeting and since the Bankruptcy Code doesn’t require the trustee to hold the meeting telephonically (though some agree to do so), then I can’t guarantee the bankruptcy would be successful for this veteran.
However, all is not lost for the military veteran serving overseas. There is a Soldiers & Sailors Act that provides limited protection to military members serving abroad. Basically, the Soldiers & Sailors Act says that a creditor cannot sue a member of the military who is stationed overseas to collect its debt. This Act recognizes that it would create an unreasonable burden on the military and on members of the military to have to try to defend themselves in court actions here in the USA while overseas. This means that if you are a member stationed overseas, you do not have to worry about being sued for non-payment of debts while you are overseas. Basically, then, there is no reason for a person serving in the military overseas to file for bankruptcy because creditors already can’t collect their debts.
Of course, the Soldiers & Sailors Act does not permanently eliminate the veteran’s obligation to pay a debt, like bankruptcy could do. Thus, there may be a need for a bankruptcy case in the future if the veteran still can’t afford to pay debts once back in the USA.
