The amazing men and women who serve in the United States military are the finest our country has to offer. They have made the choice to risk their lives to protect each and every one of us and we can never repay them enough. The commitment that the members of our armed forces are asked to give has become even more significant in the wake of the September 11 th terrorist attacks. We now have servicemen who are sent to the other side of the world for a year or more at a time, only to return home for a few months and then do it all over again. With many of our troops away in Afghanistan, Iraq, and other bases around the globe, military families are left at home struggling to pay the bills in the midst of this difficult economy. The unfortunate result is that bankruptcy filings by members of the military are on the rise, creating additional stress in already strained relationships.

Across the country, citizens have been experiencing an increase in bankruptcy filings every year throughout this recent economic crisis. According to the American Bankruptcy Institute, consumers filed 675, 351 bankruptcy filings in the first half of this year, which is up 36.5% from the same period last year. The same organization estimates that there will be a total of 1.4 million new bankruptcy filings by the end of the year, which would be a substantial increase over the 1.06 million filed in 2008 and the 801,840 cases during 2007. [1]

The residents of Texas are faring better than the country as a whole, but there are still plenty of people who are suffering. In the twelve-month period that ended on June 30, 2009, there were nearly 50,000 incidents of bankruptcy filings in the Lone Star State. The Southern District of Texas, which includes Houston, was the only region of the state to experience a decrease in filings over the past year. [2] However, even this section of Texas is seeing the number of bankruptcies accelerate as the year progresses.

What do these daunting numbers mean for our military servicemen and women? In the state of Texas alone, there are close to 200,000 military personnel representing every branch of the armed forces. [3] From Randolph Air Force Base to Fort Hood to Corpus Christi Naval Air Station, service members and their families are operating on incomes that are certainly less than they deserve and are often worried about how next month’s bills are going to be paid. The financial situation is particularly strained when children are involved. With one parent overseas, there is the decision that must be made between surviving on one military income or paying the cost of full-time day care and returning to work for an additional paycheck.

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Just looking at recent foreclosure statistics provides one important indicator regarding the money crunch that soldiers are facing. The number of homes in foreclosure in the United States rose 59 percent in the first quarter of 2008 when compared to the previous year. Foreclosures during the same time period in towns near military bases were up an average of 217 percent. [4] Our men and women in uniform are undoubtedly experiencing a disproportionate level of economic hardship. Fortunately, there are some protections in place for the members of our military who must face these difficult decisions.

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The most significant piece of federal legislation that works to save the assets of our military personnel is the Servicemembers Civil Relief Act (SCRA). The SCRA prevents the filing of a default judgment by a creditor, requires that notice be given to a military member about his or her accounts, and can wipe out judgments and garnishments against service members. [5] These protections often help to make filing for bankruptcy unnecessary for members of the military, or at least diminish bankruptcy as an appealing option. And, the SCRA extends to anyone who is a co-signer or shares debt with a military member, which certainly helps the family members who are making financial sacrifices at home. In order to qualify for the protections offered by SCRA, personnel must show that their service is materially affecting their ability to pay the bills. For most young, enlisted families, such verification will not be difficult.

The state of Texas also offers bankruptcy protection for those serving in the military, as spelled out in MISC 10, 1035, 46, 1111, 38 and 562 of the Texas Bankruptcy Code. [6] This law states that if a debtor is serving active duty in the military and is stationed abroad, his or her military deposits in savings accounts are exempt from seizure. As is also enforced on the federal level through the SCRA, Texas bankruptcy law states that U.S. courts can stop any judgment if ability to pay is directly affected by military service. This exemption usually remains in place through the length of the debtor’s military service plus three months. If the immediate need to pay creditors is removed, then some of the pressure to declare bankruptcy is hopefully alleviated. The government does recognize the financial strain that is being placed on our military families and has taken these steps to provide at least some level of relief.

The key to bankruptcy protections for the military on both the federal and state level is the need for the service member to be aware of them. There is not necessarily going to be a workshop or a convenient handout that is offered to military families when they begin to struggle with household finances. As with most challenges to our personal circumstances, the best course of action is to be your own best advocate. If you are a member of our armed forces, or in a military family, and you are facing a debt that seems insurmountable, you should contact a bankruptcy attorney before making any major decisions that will affect your future. It may turn out that filing for personal bankruptcy is the best solution for your specific situation, but please be aware of all of your options first. An attorney who is experienced in bankruptcy law will be able to dissect your current financial picture and assess the best way to move forward. You have given so much simply through your decision to serve. Make sure you are taking full advantage of the small ways in which our government is trying to give back.

[1] Fears, Bryan, “Consumer Bankruptcy Filings on the Rise,” Texas Bankruptcy Blog,, July 31, 2009.

[2] Taylor, Frank, “Bankruptcy filings continue to exceed 2008 numbers nationwide and in Houston,” Houston U.S. District Court Examiner,, August 25, 2009.

[3] Powers, Rod, “U.S. Military Bases and Installations,”,, 2009.

[4] Pavese, Phyllis, “Record Foreclosures Strike Military at Home,” Total Bankruptcy,, 2009.

[5] “Bankruptcy for Military Service Personnel,”,, April 27, 2007.

[6] Leopold, Marius, “10 Texas Bankruptcy Laws,” Ezine Articles,, June 9, 2009.

Attorney Tony R. Bertolino is the Managing Partner with Bertolino LLP. Our law firm has been able to help people across the state of Texas. If you need an experienced lawyer to represent you, contact Bertolino LLP today.

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