A bankruptcy filing can occur only after credit counseling. For more of us, it’s a pain in the neck and a burden. But for some people, taking time to get your certification before filing for bankruptcy could be hazardous to your health.
Let’s say you’re in the military, protecting the United States. You may be able to avoid your credit counseling requirement before your bankruptcy case is filed.
Section 109(h)(4) of the U.S. Bankruptcy Code says that:
The [bankruptcy credit counseling] requirements … shall not apply with respect to a debtor whom the court determines, after notice and hearing, is unable to complete those requirements because of … active military duty in a military combat zone.
According to military.com, a “combat zone” is defined as:
any area the President of the United States designates by Executive Order as an area in which the U.S. Armed Forces are engaging or have engaged in combat. An area usually becomes a combat zone and ceases to be a combat zone on the dates the President designates by Executive Order.
Currently, the designated combat zones are:
- Arabian Peninsula Areas, beginning Jan. 17, 1991 — the Persian Gulf, Red Sea, Gulf of Oman, the part of the Arabian Sea north of 10° North latitude and west of 68° East longitude, the Gulf of Aden, and the countries of Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
- Kosovo area, beginning Mar. 24, 1999 — Federal Republic of Yugoslavia (Serbia and Montenegro), Albania, the Adriatic Sea and the Ionian Sea north of the 39th Parallel.
- Afghanistan, beginning Sept. 19, 2001.
Source: Internal Revenue Service
If you live in New York and are in active military duty in a military combat zone, you can still file for bankruptcy. You don’t need to do the credit counseling prior to filing for bankruptcy.
But you do need to file a motion and get bankruptcy court approval of the waiver. In New York there are a lot of active duty military folks, and it’s no unheard-of for one of our service members to need to file for bankruptcy.
So for many, this exemption from the law is a welcome relief.
Photo of a tank crew standing in front of an M-4 tank at Ft. Knox, KY from Flickr.
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