Congressman Cohen Hails House Passage of National Guard and Reservists Debt Relief Bill

July 23, 2019
Press Release
Permits veterans to avoid “means test” when filing for bankruptcy

WASHINGTON – Congressman Steve Cohen (TN-09) today hailed House passage of the National Guard and Reservists Debt Relief Extension Act that he introduced in June with Representatives Ben Cline (R-VA), Tim Burchett (R-TN) and Madeleine Dean (D-PA). The vote was 417 to 1.

The bill ensures that certain members of the National Guard and Reserves can obtain bankruptcy relief without the burden of the “means test” under Chapter 7 of the Bankruptcy Code. 

President Obama signed into law Congressman Cohen’s 2015 version of the National Guard and Reservists Debt Relief Extension Act which expires in December. The bill passed today extends the relief for another four years.  See Congressman Cohen’s floor speech on the measure here.

Congressman Cohen made the following statement:  

“We are still engaged in America’s longest war and National Guard and Reserve members continue to return from the battlefield.  I am pleased my colleagues on both sides of the aisle saw the wisdom of extending this protection for another four years. This bill recognizes the sacrifice made by National Guard and Reserve members who have served on active duty or homeland defense since September 11 and experienced financial hardship.  Those returning home today should have the same, fair process we have provided for since 2008.”  


In 2005, President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act into law (Public Law 109–8, 119 Stat. 23).  Among the many changes it made was the establishment of a “means test” to determine a debtor’s ability to repay debts. Under this test, a Chapter 7 bankruptcy case is presumed to be an abuse of the bankruptcy process if it appears that the debtor has income in excess of certain thresholds.  

The National Guard and Reservists Debt Relief Act of 2008, Public Law No. 110-438, created an exception to the means test’s presumption of abuse for members of the National Guard and Reserve who, after September 11, 2001, served on active duty or in a homeland defense activity for at least 90 days.  The exception is also available for 540 days after the servicemember leaves the military.  The National Guard and Reservist Debt Relief Extension Act of 2015 extended the exemption through December 2019.