This question came up several years ago and it has re-surfaced again. If you accept a military re-enlistment bonus but are unable to fulfill the term of service, is the re-enlistment bonus dischargeable in bankruptcy? Most dischargeability questions are answered within Title 11 of the United States Code – the Bankruptcy Code, which is silent on this subject. However, Title 37, Pay and Allowances of the Uniformed Services, provides at §303a for the repayment of unearned re-enlistment bonuses and further provides that:
An obligation to repay the United States under this subsection is, for all purposes, a debt owed the United States. A discharge in bankruptcy under title 11 does not discharge a person from such debt if the discharge order is entered less than five years after—
(A) the date of the termination of the agreement or contract on which the debt is based; or
(B) in the absence of such an agreement or contract, the date of the termination of the service on which the debt is based.
So the answer is yes and no. A re-enlistment bonus is dischargeable in bankruptcy, but not for five (5) years after one of two possible events listed in the statute.