Frequently Asked Questions

Can my re-enlistment bonus be discharged in bankruptcy?

Service members who receive a re-enlistment bonus or incentive pay and then leave the service before their re-enlistment period is completed can be faced with a large repayment obligation. Can this debt be discharged in bankruptcy?

In most cases, the answer is no. However, the debt can be discharged if the bankruptcy discharge is entered more than five years after—

(1) the date of the termination of the agreement or contract on which the debt is based; or

(2) in the absence of such an agreement or contract, the date of the termination of the service on which the debt is based.

If you owe the government for a bonus, incentive pay, or similar benefit, the timing of your bankruptcy case is very important. If possible, it may be advisable to wait until the five year period has expired before filing.

However, even if the debt is non-dischargeable in a Chapter 7 bankruptcy, you may still be able to deal with it through Chapter 13. Under Chapter 13, the debt, along with your other debts, is dealt with through a payment plan that is based on your income, your expenses, and the type of debts you owe. A debt to the government can often be paid through Chapter 13 without penalties and interest, and you are protected from collection activities while the plan is going on.

If you are considering bankruptcy to deal with debts owed to a government agency, it is critical to get advice from an experienced bankruptcy attorney.

Other Frequently Asked Questions:

Client Testimonials

Attorney Jason Braswell & Lisa LaCount are just wonderful...not one time have I call the office that I didn’t get a chance to speak directly to Jason or Lisa, or receive an immediate return call/email with a response. Thanks to this attorney team, my mind and our finances are in order. - C.P.

Catherine Pettit

Morgan & Morgan worked on disability benefits for my unemployed 50-year old brother who was homeless and suffering from autism/Asperger’s syndrome. We all knew nothing (!) and Mr. Morgan was a breath of fresh air.

Disability client

My experience with Morgan & Morgan was exceptional!!! I was very well informed about their procedures and felt comfortable about going forth with my case. Everything was handled with importance. - C.J.

Casmin Jones

We were fully enlightened about our situation which helped us choose our best choice concerning a problem. We would recommend Mr Braswell to our friends. - H.A.

Harold Andrews

A very respectful law firm that has very good customer service which is job one in the human world. Thank you Morgan and Morgan of Athens, GA. - W.S.

W.S.

Jason is the best lawyer ever. I appreciate everything he's done in my case. I could never thank him enough.

Bobby

Dedicated to providing superior service not found elsewhere.

Morgan & Morgan attorneys can help settle your debts such as credit card debt, auto loans and mortgage debt. Contact us if you need assistance with baknruptcy or have any questions about the process. No problem is too big or too small for us to help.