Can You Get Into the Military After Filing Bankruptcy? Skip to main content

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Can You Get Into the Military After Filing Bankruptcy?



Want to serve your country? Your credit matters.

Image Source: user Tyler Barnes. 

If you want to serve your country, you don’t want debt and other financial problems to stop you. One way to deal with bad debt is to file bankruptcy, but will that prevent you from enlisting? Here is what you need to know about debt, finance, and the military.

Pre-enlistment Credit Checks

The Air Force and Coast Guard both run credit checks prior to enlistment and other branches may do so as well, particularly if the job you’ve selected requires a security clearance. Why does your credit matter to the military? If you’re deep in debt, the Armed Forces are concerned you might be tempted to take a bribe to steal military materials for a third party or engage in other profit-seeking activities.

Credit Score Okay But Too Much Debt?

Even if you pay your bills on time and have not filed bankruptcy, you still might be rejected by the military if payments on your debt total more than 40% of your expected military paycheck. Total up your credit cards, medical bills, student loans, car loan, and mortgage. If these exceed 40% of your starting military pay, you will likely be rejected until your debt is under control. However, bankruptcy may help you get rid of this debt.

The Coast Guard Has the Toughest Criteria

The Air Force considers too much debt at 40% of your expected pay, but the Coast Guard has a lower threshold at 30%. One-fourth of applicants to the Coast Guard are rejected because of credit issues. After all, credit and debt issues can cause distraction on the job and compromise national security or require a second job that can interfere with service commitments.

Army, Navy, and Marines More Open To Bad Credit

The Army, Navy, and Marines don’t judge past credit issues as harshly as the Air Force or Coast Guard. They are more likely to take extenuating factors—such as age, divorce, job loss, and other major life events—into account. You may still need to clean up overwhelming debt to be approved for enlistment, though, and one way to wipe your slate clean is using Chapter 7 bankruptcy. This discharges most unsecured debts right away.

Credit Matters After Enlistment Too

If your credit score doesn’t keep you from enlisting, remember that you still need to watch your debt and credit score after you sign on. If you have a security clearance, your credit will be reviewed periodically, and if you wind up overdue in debt you can’t manage, you could wind up losing your clearance, job, and military career.

Bankruptcy May Help You Get Into the Military

If you want to enlist but are concerned about your debt, talking with a recruiter is a good idea. You can have a casual chat about your goals and your worries about your debt. Don’t sign any papers and don’t let them start processing your enlistment unless you’re certain your debt won’t disqualify you.

Filing Chapter 13 bankruptcy can help by putting you on a repayment plan to get control of your debt. With Chapter 7, you can have unsecured debts wiped out immediately. If you’re concerned about your debt and security clearance, consult a bankruptcy attorney with experience with the military.

At the law offices of John T. Orcutt, we have worked with many soldiers, airmen, and sailors over the years and helped servicemen and women deal with debt so they can serve their country without stressing over debt. Contact our law offices today for a free consultation. Call +1-919-646-2654 now for a free consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.

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