Bankruptcy Protection for VA Disability Compensation: The HAVEN Act

The Honoring American Veterans in Extreme Need Act of 2018 (“HAVEN Act”) provides disabled military veterans and their families with greater protections in bankruptcy proceedings by allowing the exclusion of Department of Veteran’s Affairs (VA) and Department of Defense Disability payments from the calculation when doing means testing and disposable income calculations.  The Haven Act places military disability benefits in the same protected category as Social Security Disability Benefits. 

Note:  Benefits to current service members may still be included.  For example, monthly special compensation from the Department of Defense (DOD), and retirement pay for people on the temporary disability list.

• Chapter 7 Applicability Veterans or their family members should exclude income covered by the Act from the calculation of CMI under Chapter 7.  
• Chapter 13 Applicability Veterans or their family members should exclude income covered by the Act from the calculation of CMI, which may affect the determination of projected disposable income available under a Chapter 13 Plan.

haven-act-bankruptcy-protection-for-va-disability-compensation.pdf