Debt is a common thing in many people’s lives. This phenomenon also expands to the Canadian Armed Forces members as members of the military are also ordinary, everyday people. Unfortunately, many members of the Armed Forces get trapped in the debt cycle.
Debt can cause many problems in daily life and for our soldiers fighting for our freedoms.
How Does Debt Impact My Ability to Join the Canadian Armed Forces?
Before any person can join the military in Canada (and many other countries) they must pass a thorough application process. Part of this application process will be a credit check. Known as the “Reliability and Security Screening,” this process is designed to test your trustworthiness. While it is possible to join the military if you have debts, you will be questioned about your plans to repay this debt and if your debt problem is serious enough you might be precluded from joining the military.
Checking your credit history and debts and other financial obligations is part of a security clearance check.
Your personal debts are considered private debts when you are part of the military.
Under the Form DAOD 5019-8A, the Canadian Armed Forces do not have the power to compel a member of the Armed Forces to repay their private debts. However, under the Garnishment, Attachment, and Pension Diversion Act, section 15, the CAF (Canadian Armed Forces) have the authorization to order compulsory debt repayments from any officer or non-commissioned member of the Armed Forces for certain debts, mainly financial support orders and debts arising from judgment orders.
People with bad credit are not prevented from joining the military, although you might be prevented from getting a Top Secret security clearance. Being prevented from getting a Top Secret security clearance could prevent you from getting approved for certain positions in the military. However, once you have cleared your debts, you can begin rebuilding your credit and working towards receiving your Top Secret security clearance.
Who Deals With Debt Complaints Against Canadian Armed Forces?
When a creditor makes a debt related complaint against an active member of the Canadian Armed Forces, the complaint will be handled by the Chief of the Defence Staff. The Commanding Officer will follow a set procedure table in regards to dealing with the debt. In certain cases, a member of the Canadian Armed Forces will have their security clearance revoked if they are dealing with a serious debt matter. Living with debt can cause poor decision making so your security clearance can be revoked to prevent any poor decisions on the part of the military member.
Can Military Members File Bankruptcy in Canada?
Yes, members of the Canadian Armed Forces are able to file for bankruptcy in Canada. The bankruptcy laws are available to anyone who needs a fresh start. Getting a fresh financial start is every Canadian’s right and if you are a military member dealing with a debt problem you can take advantage of the insolvency laws in Canada. Although bankruptcy is available to all Canadians, we suggest that people struggling with debt explore all of their debt relief options, such as a consumer proposal, before they decide to file bankruptcy. As with any other person, bankruptcy should only be a last resort for members of the Canadian Armed Forces.
Article written by Earl Sands, MBA, CGA, CPA, CIRP, LIT, a Licensed Insolvency Trustee. He wrote the Canadian Insolvency Guide, which was first published in 2005 by Self Counsel Press and has been sold in stores across Canada and online. He currently operates one of the best resources on the Internet; Bankruptcy Canada.
He started Bankruptcy Canada in 1999 to provide bankruptcy information for Canadians in all provinces and territories in Canada. The objective of the Bankruptcy Canada website is to provide a person, who is considering declaring bankruptcy or making a consumer proposal, the information he or she needs to come to an informed decision.