J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

If you reenlisted in the U.S. Army, Navy, Air Force or Marines and received a bonus, and for some reason you could not complete your agreed-upon service, you may have to repay part or all of the money. And the reenlistment bonus cannot be discharged in bankruptcy for 5 years after the termination of your agreement or contract, or if you don't have an agreement or contract, 5 years after the termination of the service. on which the debt is based. This also applies to military incentive pay and other special pay. 37 U.S.C. Sec. 303a. 

I had a case like this one time where a person had attended a military academy, but did not complete their promised length of service. It was the same thing; he could not discharge the debt in bankruptcy, at least for five years.

There are some exceptions to having to repay the bonus, incentive or special pay. If you received a "sole survivorship discharge," if you retired or separated with a combat-related disability, or if the Secretary of Defense determines that making you repay it "would be contrary to a personnel policy or management objective, would be against equity and good conscience, or would be contrary to the best interests of the United States." 37 USC Sec. 303a(e).

Do you think this is fair to service members, that they cannot discharge these repayment obligations for five years? Please leave your comments or questions below.

Be the first to comment!
Post a Comment