The HAVEN Act was introduced on May 23, 2019, passed the House on July 23, 2019, passed the Senate on August 1, 2019, the President signed the bill on August 23, 2019 and it became law, that day. Congress expressed its desire to protect disabled veterans. So how does the law work to protect and who does it protect?
The HAVEN Act excludes disability income pay from the bankruptcy ‘means test’. The ‘means test’ is used to qualify a debtor in chapter 7 and to determine the length of the plan and amount paid to unsecured creditors in a chapter 13. In chapter 7, if the difference between your income and allowable expenses leaves an amount that if multiplied by 60 that sum would pay at least 25% of the total amount of your unsecured debt, then you don’t qualify for chapter 7 relief. In chapter 13, the difference between your income and allowable expenses is the amount you pay your unsecured creditors, if your chapter 13 also cures a default on a home or automobile, that amount is on top of what you pay your unsecured creditors. Excluding income makes it easier to qualify for a chapter 7 or a lower chapter 13 monthly payment.
If you filed a chapter 13 case and your plan is not confirmed and you have included income that could have been excluded, you may be able to qualify for chapter 7 or a lower plan payment.
If you filed a chapter 13 case and your plan is confirmed and you have included income that could have been excluded, you may be able to modify your plan to a lower monthly payment.
How do you know if your monthly payment can be excluded from the ‘means test’? Check your Award Letter, Paystubs (LES) and Service Records. How to obtain a copy of these documents?
Both Permanent and Temporary Disability Retired Pay 10 U.S.C. §§ 1201, 1204, 1202, 1205, (Chapter 61,, Title 10) paid monthly to former or current servicemember upon permanent or temporary military retirement due to disability.
Disability Severance Pay 10 U.S.C. §§ 1212, 1203, 1206 paid as lump sum to servicemember upon military separation due to disability when circumstances do not meet criteria for disability-based military retirement.
Combat-Related Special Compensation (CRSC) 10 U.S.C. § 1413a; 38 U.S.C. §§ 5304-5305 paid monthly to military retiree who has a combat-related disability; cannot be paid concurrently with CRDP
Concurrent Retirement & Disability Payment (CRDP) 10 U.S.C. §1414; 38 38 U.S.C. §§ 5304-5305 paid monthly to military retiree who is concurrently eligible to receive VA Disability Compensation and who has VA disability rating of at least 50%; cannot be paid concurrently with CRSC
Survivor Benefit Plan Annuity (as to Disability Retirees under Chapter 61 of Title 10 only 10 U.S.C. §§1443, 1201, 1202, 1204, 1205 paid monthly to military retiree’s eligible beneficiary, after retiree’s death
Special Survivor Indemnity Allowance 10 U.S.C. §1450(c), (m)paid monthly to military retiree’s surviving spouse or former spouse, after retiree’s death, if Survivor Benefit Plan Annuity payments are offset by VA Dependency and indemnity Compensation payments.
Special Compensation for Assistance with Activities of Daily Living 37 U.S.C. § 439 paid monthly to current or recent servicemember who requires help with activities of daily living due to catastrophic injury or illness incurred or aggravated in line of duty; cannot be paid concurrently with Aid and Attendance Allowance paid under 38 U.S.C. §1114(r)(2).
VA Disability Compensation 38 U.S.C. §§1104, 1110, 1114(a)-(j), 1115, 1131, 1134 paid monthly to veteran who has a disability due to disease or injury incurred or aggravated while servicing on active duty, or otherwise related to that service; payment amount depends upon disability rating (10% to 100%) and whether the veteran has qualifying dependents.
VA Special Monthly Compensation 38 U.S.C. §§1114(k)-(s), 1134 paid monthly to veteran who receives VA Disability Compensation and who has special circumstances warranting additional compensation such as having specific service- connected anatomical losses or having need for daily in-home personal health care services.
VA Dependency and Indemnity Compensation 38 U.S.C. §§1304, 1310-1318 paid monthly to eligible survivors after servicemember’s in-service or service-connected death or veteran’s death due to service-connected disability (or equated as such)
VA Veterans Pension 38 U.S.C. §§ 1502, 1513, 1521, 5312 paid monthly as subsistence benefit to veteran who meets low income and net worth criteria, satisfies service requirements, and is either at least age 65 or ‘permanently and totally disabled” (generally due to non-service-connected disability); payment amount depends upon whether the veteran has qualifying dependents and in-home health care needs
VA Vocational Rehabilitation & Employment Subsistence Allowance 38 U.S.C. §3108 paid monthly to veteran who has service-connected disability and who is participating in vocational rehabilitation program under Chapter 31
As the title of this article suggested, there is also another protection and it is under 11 U.S.C. §707(b)(2)(D). This code section allows veterans to avoid the ‘means test’ altogether if you have a 30% or greater disability rating and 50% or more of your consumer debt was incurred while you were on active duty. The purchase of a home is a consumer debt and if purchased while on active duty will usually qualify you to eliminate the ‘means test’ if you are a 30% or more disabled veteran.
Although these benefits are small in comparison to your service, they are there to help you, so take advantage of them.