Samuel F. Wright

Captain, JAGC, USN (Ret.)
Director, Service Members Law Center
(800) 809-9448, ext. 730
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National Guard and Reservists Debt Relief Act of 2008

By Captain Samuel F. Wright, JAGC, USN (Ret.)


On October 20, 2008, President George W. Bush signed into law the National Guard and Reservists Debt Relief Act of 2008 (NGRDRA), Public Law 110-438.  This new law amended federal bankruptcy law to prohibit the bankruptcy court from dismissing or converting a chapter 7 liquidation case based upon means testing if the debtor, after Sept. 11, 2001, was called to active duty for at least 90 days, as a member of the National Guard or a Reserve Component of the Armed Forces. 

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 established a means test in determining eligibility for relief from debts under chapter 7 of the Bankruptcy Act.  The NGRDRA exempts qualifying National Guard and Reserve members from this means test.  I shudder to think that Guard and Reserve members who have been mobilized are facing bankruptcy as a result, but it is at least comforting that Congress has “cut them some slack” in the bankruptcy process.

The NGRDRA also directs the Government Accountability Office (GAO), the investigative arm of Congress, to study and report to Congress on whether and to what degree members of the National Guard and Reserve:  (1) avail themselves of the benefits of the NGRDRA; (2) are debtors in federal bankruptcy cases substantially related to service that qualifies them for such benefits; and (3) are debtors in federal bankruptcy cases materially related to such service.  GAO is now conducting the study directed by Congress, and GAO has contacted ROA as part of that study.  I am studying this issue, in order to respond to GAO, on behalf of ROA.

Readers:  Were you aware of the National Guard and Reservists Debt Relief Act of 2008?  Have you utilized the benefits of this Act?  Have you represented clients who utilized these provisions?  Were these provisions helpful to you or your client?  Do you have suggestions as to how these provisions should be modified?  Are you willing to speak to GAO?

If you have relevant information on this new law, please call me at 800-809-9448, extension 730, or e-mail me


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