Disabled Veterans and Bankruptcy

As a veteran myself, it is an honor to represent fellow veterans. Especially those who are not disabled as a result of their service to our country. Being a veteran affords some additional protections in bankruptcy. Mainly, the exclusion of disability benefits from the bankruptcy means test.

The means test is an essential component of the bankruptcy process, and it has specific considerations for military veterans or disabled veterans. Here's an overview of how the means test works in relation to veterans and disabled veterans in bankruptcy:

The means test is designed to determine whether an individual's income qualifies them for Chapter 7 bankruptcy, which provides for the discharge of debts, or if they should pursue Chapter 13 bankruptcy, which involves a repayment plan. It considers the individual's income, expenses, and household size to assess their ability to repay creditors.

For military veterans or disabled veterans, certain benefits they receive may be excluded from the means test calculations. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 included provisions to exclude certain veterans' benefits from the calculation of monthly income. These benefits include veterans' disability compensation, military retirement pay, and certain benefits received under the War Hazards Compensation Act or the Uniformed Services Former Spouses' Protection Act.

This exclusion of veterans' benefits from the means test can provide significant relief for veterans facing financial challenges. It acknowledges the unique circumstances and sacrifices made by military veterans and ensures that their benefits are not counted as income for bankruptcy eligibility purposes.

It's important to note that while certain veterans' benefits may be excluded from the means test, other income sources or assets may still be considered. It's advisable for veterans considering bankruptcy to consult with an experienced bankruptcy attorney who can guide them through the process, analyze their specific financial situation, and determine the most appropriate course of action.

Additionally, it's worth mentioning that bankruptcy laws and regulations can be complex, and they may vary depending on the jurisdiction and individual circumstances. Seeking professional legal advice from a bankruptcy attorney specializing in veteran-related matters can help ensure that veterans receive accurate guidance tailored to their unique situation.