Disabled veterans would have additional protections from creditors, under a bipartisan bill now pending in the Senate. The Honoring American Veterans in Extreme Need Act, S. 679, would change existing bankruptcy laws to exclude disability benefits paid to veterans by both the Defense and Veterans Affairs departments, when calculating debtors’ disposable income.
The change would effectively put DoD and VA disability benefits in the same category as Social Security benefits, which are not subject to inclusion in disposable-income calculations. The change would apply to veterans’ survivors who receive such benefits from DoD and VA.
Sens. Tammy Baldwin, D-Wis., and John Cornyn, R-Texas, sponsored the legislation.
“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 we must do right by our veterans and protect their economic security,” said Baldwin.
“Disabled veterans fought for their country at great cost, and they shouldn’t need to fight to protect their disability benefits from creditors during bankruptcy,” said Cornyn.
Several veterans’ service organizations, including the Disabled American Veterans and Paralyzed Veterans of America, have voiced support for the measure, which is now under consideration by the Senate Judiciary Committee.