Senator Baldwin’s Bipartisan Legislation to Support Veterans Experiencing Bankruptcy Signed Into Law
HAVEN Act will amend current bankruptcy law to protect veterans experiencing financial hardship
WASHINGTON, D.C. – Bipartisan legislation introduced by U.S. Senator Tammy Baldwin has been signed into law by President Trump. The Honoring American Veterans in Extreme Need (HAVEN) Act, introduced with Senator John Cornyn (R-TX), will protect the economic security and well-being of veterans and their families who rely on disability benefits and may be experiencing financial hardship.
“Forcing our veterans and their families to dip into their disability-related benefits to pay off bankruptcy creditors dishonors their service and sacrifice. These benefits are earned and the HAVEN Act will protect the economic security of our veterans, especially during challenging times,” said Senator Baldwin. “I am proud to have worked across party lines to get this reform done and deliver results for our veterans and their families.”
Under current bankruptcy law, disability benefits paid by the Department of Veterans Affairs (VA) and Department of Defense (DoD) are included in the calculation of a debtor’s disposable income, increasing the portion of the debtor’s income that is subject to the reach of creditors. By contrast, bankruptcy law explicitly exempts Social Security disability benefits from this calculation. To remove this unequal treatment among various disability benefits, the HAVEN Act will now exclude VA and DoD disability payments made to veterans or their dependent survivors from the monthly income calculation used for bankruptcy means tests.
This legislation earned the support of the American Bankruptcy Institute, American College of Bankruptcy, The American Legion, Veterans of Foreign Wars, Disabled American Veterans, Paralyzed Veterans of America, Iraq and Afghanistan Veterans of America, Wounded Warrior Project, Association of the United States Army, Association of the United States Navy, Retired Enlisted Association, Society of Military Widows, Veterans for Common Sense and the U.S Army Warrant Officers Association.
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