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House OKs bankruptcy relief to reservists

WASHINGTON — National Guardsmen and reservists who experience financial hardships while serving in war zones would find it easier to file for bankruptcy relief under legislation the House approved Monday.

The bill, passed by voice vote, would exempt members of the Guard and reserve who have served at least 90 days in Iraq and Afghanistan from the means testing included in a 2005 bankruptcy overhaul act aimed at reducing abuse of bankruptcy law.

“Today’s passage brings us another step closer to providing modest financial relief to reservists and Guard members who are struggling to make ends meet because of their service,” said Rep. Jan Schakowsky, D-Ill., sponsor of the bill.

Her Republican co-sponsor, Rep. Dana Rohrabacher of California, took a swipe at his own party for not acting sooner to help out reservists.

He said that when Schakowsky offered a similar measure at the time the bankruptcy bill was being considered in 2005, GOP leaders misinformed their own members, telling them the measure was redundant because it was already part of the bill.

“In order to prevent even one success by the other party, the leaders of my party threw aside considering the well-being of our returning heroes,” Rohrabacher said. In 2005, Republicans were the majority party in the House.

The 2005 act does exempt disabled veterans from means testing, but not Guard members and reservists.

According to the House Judiciary Committee, between Sept. 11, 2001, and Nov. 30, 2007, about 450,000 Guard members and reservists have deployed to Iraq and Afghanistan. It cited estimates that up to one-quarter of deployed Guard members may suffer from money problems because of a fall in income levels while they are overseas.

The means testing applies to Chapter 7 bankruptcies — where debts can be dissolved entirely except when the debtor has the financial wherewithal to repay part of it.

The legislation must still be considered by the Senate.