info@hlfranklin.com

For Veterans in Bankruptcy: Understanding the HAVEN Act

While some veterans return from duty and have an easy time moving back into society and a more ‘normal’ life, others have an extremely difficult transition. Many times, veterans are under extreme duress emotionally, and for many years after— perhaps even suffering from PTSD—and they may also have a wide range of physical injuries or disabilities which require a major adjustment. Instead of returning to rewards and gratitude, they may often come home to find their homes were torn apart, their bodies crippled from the effects of war, and their bank accounts in tatters.

Like so many other individuals in the US, military veterans are often under extreme financial strain. While filing for either Chapter 7 or Chapter 13 bankruptcy may be the best plan for a better future in many cases, historically that has not always been easy for veterans to do because of a lack of protection regarding benefits from the military, and specific disability.

New legislation passed earlier this year, in the form of the Honoring American Veterans in Extreme Need Act of 2019, called the HAVEN Act. The HAVEN Act protects veterans from having their disability compensation diverted to creditors or debt collection agencies upon filing for bankruptcy. This income is excluded from the bankruptcy definition of “current monthly income” which can reduce the amount required to be paid in a Chapter 13 case, or can help with eligibility for a Chapter 7 case.

The new legislation covers many types of disability compensation for military veterans—from temporary to permanent disability-related retired pay, severance, combat-related special compensation, survivor benefits, along with VA disability compensation. The HAVEN act does limit the inclusion of some benefits, but this positive legal action should affect nearly 5 million veterans.

You probably have many questions about bankruptcy, including which type of bankruptcy will work best for you, how much you will have to sacrifice (very little in many cases), and whether you will have to go to court. Speak with a skilled bankruptcy attorney from the offices of H. Lehman Franklin, P.C. Call now to learn more at 912-764-9616, or contact us online.