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HAVEN Act Protects Veterans Filing Chapter 7 In Springfield Missouri

Military veterans filing for bankruptcy can benefit from the Honoring American Veterans in Extreme Need (HAVEN) Act of 2019, which provides disabled military veterans with greater protections in bankruptcy proceedings when filing Chapter 7.

Prior to the passage of the HAVEN Act, federal Department of Veterans Affairs (VA) and Department of Defense disability payments were included when calculating a client’s means test and disposable income when in bankruptcy.

Using this income in the means test could often make a difference in whether the veteran would qualify for a Chapter 7 bankruptcy or be required to pay the benefit to the creditors in a Chapter 13 bankruptcy.

The HAVEN act protects military benefits earned by our veterans in the same way social security benefits are protected. The military benefits are now exempt from the means test calculation.

The actual language of the exception reads as follows:

“(IV) any monthly compensation, pension, pay, annuity, or allowance paid under title 10, 37, or 38 in connection with a disability, combat-related injury or disability, or death of a member of the uniformed services, except that any retired pay excluded under this subclause shall include retired pay paid under chapter 61 of title 10 only to the extent that such retired pay exceeds the amount of retired pay to which the debtor would otherwise be entitled if retired under any provision of title 10 other than chapter 61 of that title.”

The HAVEN Act was signed into law on August 23, 2019, and became effective immediately.  This means any veteran filing Chapter 7 in Springfield Missouri is no longer required to include their veteran benefits as income when calculating the means test.

Specific benefits that are protected under the Haven Act include:

  • Permanent Disability Retired Pay
  • Temporary Disability Retired Pay
  • Retired or Disability Severance Pay for Pre-Existing Conditions
  • Disability Severance Pay
  • Combat-Related Special Compensation
  • Survivor Benefit Plan for Chapter 61 Retirees
  • Special Survivor Indemnity Allowance
  • Special Compensation for Assistance with Activities of Daily Living
  • VA Veterans Disability Compensation
  • VA Dependency and Indemnity Compensation
  • VA Veterans Pension

Veterans advocates pushed for the HAVEN Act following recent Bankruptcy Court Decisions that held that under previous bankruptcy law, disabled veterans were required to include military disability in their disposable income in bankruptcy proceedings.  The passing of this law will benefit veterans seeking debt relief through bankruptcy.

Understanding new bankruptcy laws and what they mean for filers is an important aspect of which bankruptcy law firm you choose to work with.  The Licata Bankruptcy Firm is prepared to offer legal advice to veterans of Southwest Missouri that find themselves struggling with debt.

Military veterans can benefit from a no-obligation, free consultation to determine if bankruptcy is the best option for a financial fresh start.