The Honoring American Veterans in Extreme Need Act of 2019, also known as the HAVEN Act, was signed into law in August of 2019. When filing for chapter 7 or chapter 13 bankruptcy, the HAVEN Act changes the calculation of the debtor’s current monthly income.
Prior to the Act, veterans had to include certain military benefits into their disposable monthly income calculation. In other words, Federal Department of Veterans Affairs (VA) and Department of Defense disability payments were included in the calculation of disposable income. With the Act signed into law, veterans are no longer required to include them.
This means that the disability payments are no longer within the reach of creditors. Likewise, when the court is deciding whether the debtor can have their debt discharged, their disposable monthly income will be lower, resulting in a higher chance of discharging some or all of their debts.
In comparison, social security disability benefits have been exempt from disposable income calculations. The HAVEN Act now places military disability benefits into the same category.
“(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 benefits protected under the HAVEN Act include:
At Parker & DuFresne, we understand the unique challenges that our veteran face financially.
We will guide you through every step of the process and ensure you keep the benefits you have earned. Likewise, we will help you rebuild your credit after the bankruptcy is filed. Once your debt is restructured in Chapter 13 or eliminated in Chapter 7, you will want to turn your attention to your financial future.
As a result, you will have the knowledge, tools, and education needed to rebuild your credit and start over with a positive financial outlook.
Parker and DuFresne
