HAVEN Act brings Relief to Military Veterans in the form of Increased Income Protections


A new federal law, the Honoring American Veterans in Extreme Need Act of 2019 or the HAVEN Act (H.R. 2938) was passed by the Senate’s House of Representatives on August 23, 2019 and implemented the same day.


This law has been introduced to protect the disabled military veterans who are facing bankruptcy proceedings. These veterans have already paid their precious years towards serving the nation, be it in a physical, emotional or even financial form. Keeping this in view, HAVEN Act has been enacted to protect them from any latter sufferings.


The Bill amends the definition of current monthly income to include any amount paid by any entity other than the debtor (or in a joint case the debtor and the debtor’s spouse), on a regular basis for the household expenses of the debtor or the debtor’s dependents (and in a joint case the debtor’s spouse, if not otherwise a dependent). [New Section 11 U.S.C. § 101 (10A) (B) (i)]


The Social Security disability benefits are excluded from computing a debtor’s disposable income. The HAVEN Act places military disability benefits in the same protected category as Social Security disability. [New Section 11 U.S.C. § 101 (10A) (B) (ii) (I)]


The definition also excludes payments provided to victims of war crimes or crimes against humanity as well as victims of international terrorism or domestic terrorism as defined in section 2331 of title 18 Crimes and Criminal Procedure. [New Section 11 U.S.C. § 101 (10A) (B) (ii) (II) and (III)]


A fresh exclusion is, any monthly compensation, pension, pay, annuity, or allowance 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 sub clause 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. [New Section 11 U.S.C. § 101 (10A) (B) (IV)]


The Act received great support from both the Houses and Senate, and was also approved by both the American Bankruptcy Institute and a host of veterans’ advocacy organizations.


Some specific benefits which are safeguarded under the HAVEN Act are Permanent Disability Retired Pay, Temporary Disability Retired Pay, Retired or Disability Severance Pay for Pre-Existing Conditions, Disability Severance Pay, Combat Related Special Compensation, Survivor Benefit Plan for Chapter 61 Retirees, Special Survivor Indemnity Allowance, Special Compensation for Assistance with Activities of Daily Living, VA Veterans Disability Compensation, VA Dependency and Indemnity Compensation, and VA Veterans Pension.


Earlier, disabled veterans were required to take military disability as their disposable income in bankruptcy proceedings. But the advent of this new liberal law has brought more relief to a particular section of people needing support. These veterans can now utilize their disability benefits for their sole purpose and not use them as an income to pay back creditors.

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