How Does the HAVEN Act Apply to Bankruptcy Cases?
If you are a veteran of the US armed forces and you are struggling with debt, it is critical to learn more about the HAVEN Act and how it might apply to your bankruptcy case if you are considering filing. In short, the Honoring American Veterans in Extreme Need Act of 2019 (HAVEN Act) makes it easier for veterans to qualify for Chapter 7 bankruptcy and can make it so that a veteran’s regular payment in a Chapter 13 bankruptcy case is lower than it otherwise would have been. How does the HAVEN Act do this? It can lower the total amount of a veteran’s disposable income, depending on whether or not they are receiving veterans’ disability benefits. Our West Palm Beach bankruptcy attorneys can explain in more detail below, and we can speak with you today if you want to learn more about filing for bankruptcy in South Florida.
What is the HAVEN Act?
The primary purpose of the HAVEN Act was to modify “the treatment of certain veterans’ benefits in bankruptcy.” More specifically, the text of the bill explains, the Act “excludes from a debtor’s current monthly income certain benefits, including disability benefits, paid by the Department of Veterans Affairs or the Department of Defense.”
Which Benefits Are Excluded from the Debtor’s Current Monthly Income?
There are a wide range of veterans’ disability benefits that are excluded from the debtor’s current monthly income, which can affect the debtor’s eligibility for Chapter 7 bankruptcy (i.e., the debtor may be eligible for Chapter 7 bankruptcy due to the HAVEN Act whereas they otherwise would not) and the debtor’s regular payments in a Chapter 13 repayment plan (with the HAVEN Act, the debtor’s payments may be lower). The following are just some of the benefits that are excluded from the calculation of the debtor’s income:
- Monthly disability compensation
- Pension in connection with a disability
- Combat-related injury pay;
- Annuity paid in connection with a disability; or
- Allowance paid in connection with a disability.
Since such forms of payment or compensation do not count toward the debtor’s income for bankruptcy purposes, the veteran debtor may be able to pass the means test and to qualify for Chapter 7 bankruptcy. Even if the debtor cannot pass the means test, the exclusion of these forms of pay can mean that the debtor may have to pay less over time as part of their Chapter 13 repayment plan and thus may be eligible to have more nonpriority unsecured debts discharged in their Chapter 13 case.
Contact Our West Palm Beach Bankruptcy Lawyers Today
If you are a veteran of the armed forces and are considering a bankruptcy filing in South Florida, it is important to seek legal advice. The HAVEN Act may allow you to file for Chapter 7 bankruptcy, and even if you are not eligible to file for Chapter 7 bankruptcy because you cannot pass the means test, you can still consider a reorganization bankruptcy filing under Chapter 13. Whether you have questions about your eligibility for a particular type of bankruptcy or you are ready to begin the filing process, an experienced West Palm Beach bankruptcy attorney at Kelley, Fulton, Kaplan & Eller can assist you. Contact our firm today to find out more about the bankruptcy services we provide to residents of South Florida.
Source:
congress.gov/bill/116th-congress/senate-bill/679
