http://www.cqpolitics.com/wmspage.cfm?parm1=5&docID=cqmidday-000002903244House Set to Pass Debt Relief for National Guard, Reserve Troops
The House passed Monday legislation that would make it easier for certain military reservists to file for bankruptcy.
The measure would exempt certain members of the National Guard and reserves from a means test mandated by law if they seek to erase their debts and start fresh. The test, required by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, makes a debtor seeking a clean start prove an inability to repay his or her debts over time. It requires the person to document average monthly income for the previous six months, not current income.
Such a test for reservists returning from battlefield deployments could artificially inflate their ability to pay their bills because of the high hazardous-duty pay and low living expenses they experience during combat tours.
“The men and women who will risk their lives to protect us deserve protection in return,” said Jan Schakowsky , D-Ill., the bill’s sponsor, during an April 1 hearing on the subject in the House Judiciary Commercial and Administrative Law Subcommittee. The panel approved the measure by voice vote April 24, and the full committee approved the bill June 11.
The bill would exempt from the means test reservists who were called to active duty or performed a homeland defense activity for at least 90 days after Sept. 11, 2001. The exemption would extend for as long as they are activated and a year and a half thereafter. Veterans of the regular armed forces are already exempted under existing law.
The bill also would require the Government Accountability Office to study the effects of the bill and determine whether abuses exist.
The legislation has 65 cosponsors from both parties and has been endorsed by a number of military and veterans’ support organizations.