HAVEN ACT will enable more veterans to get more and better chapter 7 and chapter 13 bankruptcy relief

Congress has enacted the HAVEN ACT. Put simply, veterans who used to not qualify for the cheaper, faster, easier Chapter 7 relief now may qualify and those who still need a Chapter 13 case may be able to pay less each month.

The HAVEN ACT now exempts certain benefits that are received by veterans which were defined previously by bankruptcy laws as not exempt. In the same vein that the bankruptcy laws excluded Social Security benefits as income, the HAVEN ACT will provide exemptions to disability benefits that Veterans receive from the Department of Veteran Affairs and the Department of Defense as defined in the new definition of current monthly income in Section 101(10A) of title 11, United States Code subparagraph (B).

This change takes effect immediately which means that Veterans will have an easier time seeking bankruptcy relief and will not have to take their disability benefits into account when filing bankruptcy. The full impact of the change will not be fully known until there is more information but this change will certainly be of great assistance to our veterans who need to seek relief after past their service.

The HAVEN ACT text can be found at: https://www.congress.gov/bill/116th-congress/senate-bill/679/text and is duplicated below:

H.R.2938 - HAVEN Act

To exempt from the calculation of monthly income certain benefits paid by the Department of Veterans Affairs and the Department of Defense.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Honoring American Veterans in Extreme Need Act of 2019” or the “HAVEN Act”.

SEC. 2. DEFINITION OF CURRENT MONTHLY INCOME.

Section 101(10A) of title 11, United States Code, is amended by striking subparagraph (B) and inserting the following:

“(B) (i) includes 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); and

“(ii) excludes—

“(I) benefits received under the Social Security Act (42 U.S.C. 301 et seq.);

“(II) payments to victims of war crimes or crimes against humanity on account of their status as victims of such crimes;

“(III) payments to victims of international terrorism or domestic terrorism, as those terms are defined in section 2331 of title 18, on account of their status as victims of such terrorism; and

“(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.”.

SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.

The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled “Budgetary Effects of PAYGO Legislation” for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.


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