Military Deployment

[MILLO]

I have a friend who is in our same situation, ch 13, and also in the military. He has a possible deployment to the Middle East sometime this year for about 3-5 months. He is not Active, but Reservist. The $ he'll collect is a tax free, and we're talking about a total of $8K. Does it need to be reported to the Trustee and will he keep it? Thanks.

[Minnymouth]

Unfortunately it is income, and must be reported.... and if in a Chapter 13 plan, the trustee will seize it I'm most certain.

Contact an attorney or legal aid for an answer for sure.... a phone consultation will answer your question....

[SinkingFast]

There is a section of the BK code devoted totally to military service personnel but I didn't find anything there about this type of situation.

You're best off to consult with an attny about this.

Even tho you are doing a great service for our country, and I hope Minny is wrong,......... I'd bet this will be considered income that will have to be turned over to the Trustee.

[FilingOnMyOwn]

Chap 13 is the devil.

[Minnymouth]

I believe the option to "seize" this income is at the disgretion (can't spell) of the Trustee and US Trustee.....
If they decided seizing it is a "hard ship" on the family they can make the decision to leave it alone.

Will look more into this.....

[SinkingFast]

I believe the option to "seize" this income is at the disgretion (can't spell) of the Trustee and US Trustee.....
If they decided seizing it is a "hard ship" on the family they can make the decision to leave it alone.

Will look more into this.....

That's a very good idea, Minny!!

I told Hubby about this one. We both think it's a shame that this guy could loose his active duty "bonus" for serving our country and protecting the Freedoms that we all enjoy. It's just not fair!!

Unless I'm totally wrong here, that's money to compensate for his absence from his family and his regular life anyway. And, as a Reservist, won't he NOT get paid by his regular employer while he's gone??!!

[Minnymouth]

As far as him getting PAID by his present employer while he is gone...........NO - they do not have to pay him....
We have a guy in our office that is deployed to Iraq.....
He is not paid by the company..........BUT they DO have to retain his postion for him till he returns.... They cannot give his job to anyone else........ all they can do is have someone "fill in" while he is gone.
Now if this person has vacation pay, sick pay etc..... he can draw checks on this while he's there still its all drawn out.....

The purpose of the military bonus checks is to help the family maintain the "family home" while they are overseas... often the family has to relocate, etc. during this time.

[Minnymouth]

I'm sure ANY JUDGE would frown upon a Chapter 13 plan that creates a hardship on a military family whose parent is in a battle zone or deployed overseas, especially if it means "taking the bonus" would create this hardship. The bankruptcy itself would create its own hardship on the family...

[SinkingFast]

When I was looking at the BK code, there's a whole section devoted to Military personnel and BK. Mostly, the code addresses not being able to get summary judgements against folks in the military because of thier inability to appear in Court at various times. The 341 meeting was one specifically mentioned. The law went on about other times when the debtor may be required to appear in Court and an active duty member of the armed services physically may not be able to attend due to Duty Station. Those rules applied to Reservists called to active duty as well.

But I didn't find anything addressing the issue of "bonus" pay to reservists called to active duty. I know the employer has to hold the position available for the Reservist's return, but I didn't think the employer had to pay the Reservist while they were gone. So,......... I kinda guessed the "bonus" was payment in lieu of regular pay a Reservist would otherwise draw in their regular job. I would think the active duty pay wouldn't be equal to the pay of the Reservist's regular civilian job.

Definitely something to address with an attny. Maybe the "bonus" isn't really a bonus in the sense that it simply maintains the employment level of income over the short term. Or could be used to cover "COBRA" benefits payments for health insurance and such for the family thru the Reservist's employer.

[Minnymouth]

My neighbor filed bankruptcy and then was deployed. Of course during the bankruptcy they could not foreclose due to the stay.... But also after the discharge they could not foreclose because he was deployed outside the USA...
His family stayed there till he came back, then the bank was allowed to start foreclosure proceedings......
Somewhere in the laws if a military person is deployed, especially in a war zone companies cannot foreclose, seize, etc anything they own (due to non payment) till they get back in the states.
The federal govt has guide lines protecting its military deployed overseas (especially reserves).... who would normally be in the states.

I will keep checking until I find the info and post it......

[MILLO]

Thanks everyone for your responses. My friend contacted his attorney and basically was told that this extra money is for my friend to keep. As long as he sends in the monthly payments (he'll be in leave without pay from his job), he should be ok. Again, we're talking about $8K EXTRA for a 4 month period of time. I agree with everyone, why penalize a soldier serving in the Middle East, when he also has a wife and kid back home? We'll see what happens. I know it's still a long shot and the trip may never finalize, but it's good to prepare, just in case.

[$$only4ever]

Try researching the Soldiers and Sailors Act. I know that when someone is on active duty and depolyed overseas, this act protects them from foreclosure, bad credit reporting, defaulting their loans. etc.