Military veterans in California may find themselves struggling under the crushing weight of excessive debt. This can be especially true for disabled veterans who rely on military pensions and benefits to support themselves. From medical bills to personal needs, costs can easily stack up, especially when interest mounts. When people have difficulty working and obtaining a regular income, they may find it especially challenging to pay off their bills. As a result, they may face creditor calls and even threats of lawsuits. Personal bankruptcy can be an important mechanism for people to obtain a clean slate and move forward.

Around 15% of all filings for both Chapter 7 and Chapter 13 bankruptcy come from military veterans. This is a disproportionate number, as veterans make up only 10% of the overall population. In just one year, 2017, around 125,000 military veterans filed for bankruptcy protection. However, before the passage of the HAVEN Act in 2019, disability payments for veterans were considered part of a veteran’s disposable income. This left the income vulnerable to creditors, as income is considered when determining eligibility for Chapter 7 bankruptcy. In Chapter 13 bankruptcy, disposable income is used to calculate an ongoing payment plan. Unlike military disability benefits, Social Security Disability payments were excluded from this calculation.

Under the HAVEN Act, a wide range of military disability benefits are excluded from the calculation of disposable income, giving veterans more protection during the bankruptcy process. The law went into effect on August 23, 2019, and it received widespread bipartisan support from both houses of Congress.

Veterans and others who are facing an insurmountable debt burden may be looking for an option to escape the neverending rounds of creditor calls and demands. A bankruptcy attorney can provide advice on how Chapter 7 or Chapter 13 bankruptcy might help people find debt relief.