Bankrupt vets can lose their disability benefits. This new effort would protect them.
By: Joshua Axelrod
March 7, 2019
Two senators just introduced a bill designed to shield veterans’ disability benefits from debt collectors.
When a disabled vet declares bankruptcy currently, the law allows debtors to count a veteran’s disability benefits as disposable income, allowing them to seize the benefits.
Yet Social Security disability benefits are exempted by law from being lumped into a person’s disposable income in bankruptcy filings, and disability benefits in any form aren’t taxable and therefore generally not considered disposable income.
This state gives vets and their families free college tuition — without touching their GI Bill benefits The Honoring American Veterans in Extreme Need (HAVEN) Act seeks to create the same immunity in bankruptcy cases for benefits provided by the VA and Department of Defense to disabled veterans and their surviving spouses.
Sen. Tammy Baldwin, D-Wis., and Sen. John Cornyn, R-Texas, introduced the bill, which has already been endorsed by 10 Republican and 10 Democratic senators. It has also earned the support of organizations like the American Legion, Disabled Veterans of America and the American Bankruptcy Institute, among others.
“Right now, veterans and their families are forced to dip into their disability-related benefits to pay off bankruptcy creditors,” said Baldwin during an unveiling event for HAVEN in her Senate office. “And that’s not right. This reform will protect veterans’ disability benefits when they fall on hard times.”
read more here