House OKs National Guard and Reservists Debt Relief Bill

National Guard Deploys For Hurricane Relief

The House passed legislation that makes sure certain members of the National Guard and Reserves get bankruptcy relief while avoiding the “means test” under Chapter 7 of the Bankruptcy Code. 

The National Guard and Reservists Debt Relief Extension Act was introduced by Reps. Steve Cohen, Tenn., Ben Cline, R-Va., Tim Burchett, R-Tenn., and Madeleine Dean, D-Pa. 

The means test aims to stop high-income earners from wiping their financial slate clean through Chapter 7 bankruptcy. If the debtor’s income tops a certain threshold, the means test assumes he or she is abusing the bankruptcy process. Under the National Guard and Reservists Debt Relief Extension Act, veterans don’t have to deal with the means test when filing for bankruptcy.

Cohen’s 2015 version of the act is slated to expire in December and the bill passed this week extends the relief for another four years.  

“This bill recognizes the sacrifice made by National Guard and Reserve members who have served on active duty or homeland defense since Sept. 11 and experienced financial hardship,” Cohen said in a release. “Those returning home today should have the same, fair process we have provided for since 2008.”  

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