President Joe Biden on Tuesday signed into law a bipartisan bill supported by U.S. Sen. Thom Tillis (R-NC) to extend an exemption under Chapter 7 bankruptcy for qualifying members of a U.S. Armed Forces Reserve component or the National Guard.
“The men and women who serve in the National Guard and Reserves provide an invaluable service to our nation,” Sen. Tillis said on Dec. 19. “I am proud this bipartisan legislation [was] signed into law so we can ensure protections for members if they fall on financial hardship.”
The National Guard and Reservists Debt Relief Extension Act of 2023, S. 3328/H.R. 3315, reauthorizes an additional four years of relief for qualifying National Guard and Reserves members experiencing financial hardship, and will protect a long-standing bipartisan carveout from means-testing restrictions in Chapter 7 bankruptcy cases, according to a bill summary provided by Sen. Tillis’ staff.
The U.S. House of Representatives on Dec. 11 approved the bill, which the U.S. Senate then passed on Dec. 14. The president received the bill on Dec. 19 and signed it into law that same day.
Specifically, the measure reauthorizes the National Guard and Reservists Debt Relief Act of 2008, which included a clause exempting qualifying members of reserve components of the Armed Forces and the National Guard from provisions in the Bankruptcy Code that limit access to Chapter 7 bankruptcy based on recent income, the summary says.
Because National Guard members and Reservists often receive higher pay while on active duty than at their civilian jobs, these limits could otherwise prevent them from receiving financial relief in bankruptcy and the bill ensures they are not penalized for their service, states the summary.
Sen. Tillis on Nov. 15 cosponsored S. 3328 alongside bill sponsor U.S. Sen. Dick Durbin (D-IL) and seven other original cosponsors as the identical bill to H.R. 3315, which U.S. Reps. Steve Cohen (D-TN) and Ben Cline (R-VA) introduced on May 15.