Switch to ADA Accessible Theme
Close Menu
Florida Bankruptcy Lawyer
Call Today For A Free Consultation 866-907-2970 Hablamos Español

$0 down and low payment plans available. We can assist you without having to leave your home.

Trump Signs Law Protecting Veterans Disability Payments in Bankruptcy


To qualify for Chapter 7 bankruptcy, a filer cannot have income that is too high. Instead, he or she must pass a means test that looks at how much the filer earns and compares it to the median for his state. As of August 2019, a single filer in Florida, for example, cannot make more than $49,172. If this person is married to someone else who works, then the couple cannot have an income that exceeds $60,400.

Not all income counts, and the bankruptcy code will allow certain disability benefits to be excluded. A new law signed by President Trump will protect disability payments made to veterans and exclude them from the calculation.

Currently, Social Security disability payments are exempt. If you file for bankruptcy, then those benefits will not count as disposable income. However, there was no exemption for disability benefits paid by Veteran’s Affairs or the Department of Defense—until now.

How the Law Could Help You

The law is called the Honoring American Veterans in Extreme Need Act, HAVEN for short. The law will come into play if you file Chapter 7 or Chapter 13.

As explained above, your disability payments will not count toward calculating your Current Monthly Income, which is used to determine if you pass the Chapter 7 means test. So applicants who couldn’t qualify before might be able to now.

The law also impacts a Chapter 13 bankruptcy. In this bankruptcy, the filer does not lose non-exempt property. However, he must contribute his disposable income to certain creditors over the course of several years. Because the HAVEN Act excludes certain veterans’ disability benefits, those benefits no longer count toward calculating disposable income, so you can end up paying less over the course of a Chapter 13.

Proving Your Benefits

The Justice Department has already stated that it will limit any request that you provide documentation to prove how much you are receiving in disability benefits. This is helpful, because it should speed up the bankruptcy process.

However, your attorney will probably request to see some documentation so that you are accurately calculating the amount of benefits. You don’t want to claim that you are receiving more in benefits than you really are because that is bankruptcy fraud. Submitting inaccurate information that needs to be cleaned up later also slows the bankruptcy process. Share whatever documents you have that identify the current amount of disability benefits you are receiving.

Speak with a Plantation Bankruptcy Attorney

Veterans sometimes run into financial problems just like all civilians, but a disability can easily make financial stress that much more intense.

If you are struggling to pay bills and want to discuss your options, speak to a Plantation bankruptcy lawyer at Nowack & Olson today. Our team has helped tens of thousands of people just like you go through the bankruptcy process, and we are eager to help you as well.

For more information, please contact us today. You can schedule a complimentary consultation by calling 888-813-4737 or sending us a message.





Facebook Twitter LinkedIn