Bankruptcy for Active-Duty Service Members

How does bankruptcy actually work for someone on active duty?

The Bankruptcy Code has no separate military chapter. A service member files the same Chapter 7 or Chapter 13 case as a civilian, in the district where they reside, have a domicile, a place of business, or property (11 U.S.C. § 109(a)). Chapter 7 generally discharges qualifying debts after a trustee reviews non-exempt property; Chapter 13 generally works through a repayment plan submitting future earnings to the trustee's supervision (11 U.S.C. § 1322(a)(1)).

What is different is narrow but useful. Congress wrote a military carve-out into the Chapter 7 abuse analysis at 11 U.S.C. § 707(b)(2)(D), and courts have adopted local rules and interim rules addressing how that exclusion interacts with the forms you file. Separately, many districts require any party seeking a default judgment or stay relief against an individual to first tell the court whether that person is in military service. Those are the two axes to understand: what you must file, and what creditors must do before a court rules against you by default.

• Same chapters, same court, same forms as a civilian case.
• A means-test exclusion at 11 U.S.C. § 707(b)(2)(D) for qualifying military filers.
• Local rules in many districts requiring a military-status affidavit from creditors seeking default relief.

Who gets the military exclusion from the means test?

The exclusion is not automatic for everyone in uniform, and the official forms are precise about who it reaches. Official Form 122A-1Supp, the Statement of Exemption from Presumption of Abuse Under § 707(b)(2), asks two military questions. The first asks whether the filer is a disabled veteran who incurred debts mostly while on active duty or performing a homeland defense activity; a yes answer routes the filer to check the no-presumption-of-abuse box on Form 122A-1 without completing the full calculation (Bankr. M.D. La. filing packet — Ch7_Vol_Petition_ Package-2026.pdf).

The second question asks whether the filer is or has been a Reservist or member of the National Guard called to active duty or performing a homeland defense activity. That path has date-and-duration categories on the form: called to active duty after September 11, 2001, for at least 90 days and still serving; released from active duty fewer than 540 days before filing; or performing a homeland defense activity for at least 90 days.

What does federal law say about the means test exclusion?

The operative provision is 11 U.S.C. § 707(b)(2)(D). Section 707(b) is the abuse provision generally: after notice and a hearing, a court may dismiss a Chapter 7 case filed by an individual whose debts are primarily consumer debts, or convert it with the debtor's consent, if granting relief would be an abuse of Chapter 7 (11 U.S.C. § 707(b)(1)). Subparagraph (b)(2)(A) sets up the presumption of abuse by comparing current monthly income against specified deductions.

Subparagraph (D) is where the military exclusion sits, and the bankruptcy rules build directly on it. Interim Rule 1007-I provides that unless § 707(b)(2)(D)(i) applies, or § 707(b)(2)(D)(ii) applies and the exclusion extends beyond the period specified by Rule 1017(e), an individual Chapter 7 debtor must file a statement of current monthly income and, if income exceeds the applicable state median for the household size, the full § 707(b) calculations (IBR 1007-11). In other words, the exclusion changes what you have to file, not just what the outcome might be.

• 11 U.S.C. § 707(b)(1) — the court may dismiss or convert a consumer Chapter 7 case for abuse.
• 11 U.S.C. § 707(b)(2)(D) — the military exclusion referenced throughout the bankruptcy rules.
• IBR 1007-11 — ties the filing requirement to whether § 707(b)(2)(D) applies.

What changes the answer for a particular service member?

Several facts move the analysis, and none of them is about rank or branch. The first is the nature of your debts: § 707(b) applies to an individual debtor "whose debts are primarily consumer debts," defined at 11 U.S.C. § 101(8) as incurred primarily for a personal, family, or household purpose (Bankr. M.D. La. filing packet — Ch7_Vol_Petition_ Package-2026.pdf). Debts that are primarily business debts sit outside that analysis entirely.

The second is your service category and its timing — active duty versus reserve or Guard status, the length of the call-up, and how recently you were released, all of which the supplement form asks about directly. The third is income against the applicable state median, since a filer at or below the median does not complete the second means-test form at all (Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals). The fourth is which debts are dischargeable in the first place, since 11 U.S.C. § 523(a) excepts categories including most taxes, many student loans, and domestic support obligations.

• Whether your debts are primarily consumer debts (11 U.S.C. § 101(8)).
• Your service category and the dates and duration of the call-up.
• Your income measured against the applicable state median for your household size.
• Which of your specific debts fall inside 11 U.S.C. § 523(a)'s exceptions to discharge.

Where do state and local rules differ?

Two layers vary. Exemptions — what property you keep — come from the applicable state exemption law plus the federal scheme, and the amounts differ substantially between states. We publish those figures on the state pages rather than here, because a single national number would be wrong nearly everywhere. Court guidance is explicit that exemptions are not automatic: you must list property on Schedule C, and property you fail to claim may be sold by the trustee (Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals).

The second layer is local bankruptcy rules on military status. In the District of Colorado, a debtor should inform the court of servicemember status by filing a Statement of Military Service, and failure to do so does not waive the debtor's protections (D. Colo. L.B.R. 4002-3). In the District of New Hampshire, a plaintiff moving for default judgment or a movant seeking stay relief must file a military-status affidavit, and the court will deny motions filed without one (LBR 9012-1). Similar affidavit requirements appear in Connecticut, Louisiana, and the Southern District of Florida.

What does this look like in practice?

Picture a Guard member called to active duty after September 11, 2001, for more than 90 days, released eight months ago, now carrying credit-card balances from the deployment period. On the supplement form, that person would work through the Reservist question, check the category for release from active duty fewer than 540 days before filing, and submit the supplement with a signed Form 122A-1 — rather than completing the full Chapter 7 Means Test Calculation on Form 122A-2.

Now picture the other side. A creditor sues that same person in an adversary proceeding and the person, deployed and unreachable, never answers. In a district like New Hampshire or Colorado, the creditor cannot simply take a default: it must file an affidavit stating whether the defendant is in military service, or state that it cannot determine this. If the court cannot ascertain military status from the affidavit, it may require the moving party to post a bond before entering a default judgment or lifting the stay (LBR 9012-1).

• The supplement form is filed together with Form 122A-1, not instead of it.
• Debts must still be listed in full; an unlisted debt may not be discharged.
• Creditors face procedural hurdles before winning by default against a servicemember.

What documents and information are involved?

The core packet is the same one every individual filer completes: the Voluntary Petition (Official Form 101), schedules of property, debts, income and expenses, Schedule C claiming exemptions, the Statement of Intention in Chapter 7 (Official Form 108), and the income and means-test forms. A Chapter 7 filer completes Form 122A-1, and only completes Form 122A-2 if income exceeds the applicable state median (Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals).

The military-specific document is Official Form 122A-1Supp, filed together with Form 122A-1 where a filer believes a military service provision applies. Court instructions note directly that "your military status may determine whether you must fill out the entire form" (U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements). Deadlines matter: in a voluntary case the schedules and statements are due with the petition or within 14 days after, and in Chapter 7 the financial management course certificate is due within 60 days after the first date set for the meeting of creditors (IBR 1007-11).

• Official Form 101 — Voluntary Petition for Individuals Filing for Bankruptcy.
• Official Form 122A-1 and, where income exceeds the state median, Form 122A-2.
• Official Form 122A-1Supp — Statement of Exemption from Presumption of Abuse Under § 707(b)(2).
• Schedule C — the property you claim as exempt.
• Statement of Military Service, where the district provides for one.

What does filing actually cost?

The fees do not change because you serve. A Chapter 7 case carries a $245 filing fee (28 U.S.C. § 1930(a)(1)(A), (f)(1)), a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8, effective December 1, 2023), and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Item 9, effective December 1, 2023) — the $338 total shown in the Eastern District of Louisiana's Chapter 7 packet (Bankr. E.D. La. official guidance — Chapter 7 Form Packet).

A Chapter 13 case carries a $235 filing fee (28 U.S.C. § 1930(a)(1)(B)) plus the same $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8). The Chapter 7 fee waiver is conditional under § 1930(f) and Judiciary procedures; the statute permits installment payment for an individual commencing a voluntary or joint case, and that statutory Chapter 7 waiver does not extend to Chapter 13. Attorney fees are separate and vary by district and case complexity.

What should you ask a lawyer?

Bring the service-specific questions, because those are the ones a general consumer practice may not have answered before. Ask whether your service category and dates fit either path on Form 122A-1Supp, and what documentation the trustee in your district expects to see supporting it. Ask how your district handles a Statement of Military Service and whether filing one is expected in your case.

Ask about timing against your orders — deployment, PCS, and training schedules interact badly with a proceeding that has 14-day and 60-day deadlines and a required meeting of creditors. Ask whether any of your debts fall inside 11 U.S.C. § 523(a)'s exceptions to discharge. Ask about reaffirmation before you sign anything: a reaffirmation agreement makes you legally obligated on an otherwise dischargeable debt, must be filed before discharge is entered, and court guidance strongly advises consulting counsel first (U.S. Bankr. Ct. M.D. Ala., Consumer Pro Se Debtors Guide). And ask directly about anything in your situation touching your clearance or command reporting obligations — that is a question for your legal assistance office and your chain of command, not a bankruptcy form.

• Does my service record fit either military path on Form 122A-1Supp, and what proof is expected?
• Does this district use a Statement of Military Service, and should I file one?
• How do the 14-day and 60-day deadlines and the creditors' meeting work around my orders?
• Which of my specific debts might fall under 11 U.S.C. § 523(a)?
• Should I reaffirm anything, and what happens if I don't?

Frequently asked questions

Does bankruptcy affect a security clearance?

We do not publish a verified answer to this, because clearance adjudication is governed by security policy rather than the Bankruptcy Code, and nothing in our source corpus addresses it. Raise it with your installation's legal assistance office and your security manager. What we can say is that the Bankruptcy Code itself contains no clearance provision, and filing does not appear on any bankruptcy form as a clearance question.

Am I automatically excluded from the means test because I'm on active duty?

No. The exclusion at 11 U.S.C. § 707(b)(2)(D) is defined by category and timing, not by active-duty status alone. Official Form 122A-1Supp asks whether you are a disabled veteran whose debts were incurred mostly on active duty, or a Reservist or National Guard member called to active duty after September 11, 2001, for at least 90 days, with specific rules about recent release.

What is the 540-day period on the means test supplement?

It is one of the categories on Official Form 122A-1Supp. A Reservist or Guard member who was called to active duty after September 11, 2001, for at least 90 days may check the category for release from active duty on a date fewer than 540 days before the bankruptcy case is filed. The form asks you to enter that release date.

Can a creditor get a default judgment against me while I'm deployed?

Not without addressing your military status first, in districts with a rule on it. In New Hampshire, a plaintiff must file an affidavit stating whether the defendant is in military service, and a motion without one will be denied. If the court cannot ascertain status from the affidavit, it may require a bond before entering the judgment (LBR 9012-1).

Do I have to tell the bankruptcy court I'm a service member?

In some districts you are expected to. Colorado's rule states that a debtor should inform the court of servicemember status by filing a Statement of Military Service, and adds that failing to do so does not waive the debtor's protections and does not relieve other parties of their duty to investigate your status before filing certain motions (D. Colo. L.B.R. 4002-3).

Are the filing fees different for military filers?

No. Chapter 7 carries the same $245 filing fee, $78 administrative fee, and $15 trustee surcharge for everyone (28 U.S.C. § 1930(a)(1)(A), (f)(1); Bankruptcy Court Miscellaneous Fee Schedule, Items 8 and 9). Chapter 13 carries a $235 filing fee plus the $78 administrative fee. The Chapter 7 waiver is conditional under § 1930(f), and the statute permits installment payment for individuals.

Does Chapter 13 work differently for service members?

The plan mechanics are the same. A Chapter 13 plan must submit enough future earnings or income to the trustee's supervision to execute the plan and must pay priority claims in full in deferred cash payments unless the claim holder agrees otherwise (11 U.S.C. § 1322(a)). Deployment and pay changes are practical complications worth raising with counsel before proposing a plan.

Which debts survive a bankruptcy discharge?

11 U.S.C. § 523(a) lists the exceptions, and court guidance summarizes the common ones: most taxes, most student loans, domestic support and property settlement obligations, most fines and criminal restitution, and debts you failed to list in your papers. Debts arising from fraud, theft, intentional injury, or intoxicated operation of a vehicle may also survive.

Sources

• 11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
• 11 U.S.C. § 109 — Who may be a debtor · official source
• 11 U.S.C. § 523 — Exceptions to discharge · official source
• 11 U.S.C. § 1322 — Contents of plan · official source
• 11 U.S.C. § 101 — Definitions · official source
• Bankr. M.D. La. filing packet — Ch7_Vol_Petition_ Package-2026.pdf — Official Form 122A-1Supp, Statement of Exemption from Presumption of Abuse Under § 707(b)(2)
• IBR 1007-11 — Lists, Schedules, Statements, and Other Documents; Time Limits; Expiration of Temporary Means Testing Exclusion
• LBR 9012-1 — Compliance with the Servicemembers Civil Relief Act
• D. Colo. L.B.R. 4002-3 — Servicemembers Civil Relief Act of 2003
• D. Conn. Bankr. L. R. 7055-1 — Default and Default Judgment
• LAMB LBR 7055-1 — Default
• S.D. Fla. LBR 7055-1 — Default; Default Judgment
• Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals
• U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements
• Bankr. E.D. La. official guidance — Chapter 7 Form Packet
• U.S. Bankr. Ct. M.D. Ala., Consumer Pro Se Debtors Guide
• 28 U.S.C. § 1930(a)(1)(A), (f)(1)
• 28 U.S.C. § 1930(a)(1)(B)
• Bankruptcy Court Miscellaneous Fee Schedule, Item 8
• Bankruptcy Court Miscellaneous Fee Schedule, Item 9

Related

• Build your personalised roadmap
• The means test, explained
• Chapter 7
• Chapter 13
• Which debts get discharged
• Find your local bankruptcy court