The HAVEN Act Helps Disabled Veterans
Veterans receiving VA disability benefits and filing for bankruptcy received some good news on August 23, 2019 when the HAVEN Act was passed. HAVEN stands for Honoring American Veterans in Extreme Need. Under the HAVEN Act, VA disability benefits paid to veterans and their family members are excluded from the definition of current monthly income. As a result, VA disability benefits are not counted as income under the means test, and they are not considered to be disposable income available to creditors.
VA disability benefits are now treated the same as Social Security Disability benefits in bankruptcy. Under the HAVEN Act, disabled veterans with consumer debt will be more likely to qualify for a Chapter 7 bankruptcy and less likely to have to file a Chapter 13 bankruptcy. Veterans will be able to hold onto more of their benefits. For those disabled veterans who do file for Chapter 13 bankruptcy, the HAVEN Act makes it more likely that they can successfully complete their plan.
Benefits protected under the Haven Act include permanent and temporary disability retirement pay, disability severance pay, combat-related special compensation, VA dependency and indemnity compensation and VA veterans pension. If you have questions about whether or not the Haven Act protects your VA disability benefits in bankruptcy, call 719-634-7734.