HAVEN ACT: Military Disability Proposed to be Excluded from Means Test in Bankruptcy

In March of 2019, a new Bill was introduced in the United States Senate to exclude military disability benefits from the means test in Chapter 7 and Chapter 13 Bankruptcy cases. A summary of the proposal is at the link below:


The proposed bill would treat military disability the same as Social Security Disability. Social Security Disability is currently treated as a “non income event” for the purposes of the means test in filing bankruptcy. The income from Social Security Disability will not disqualify an individual from qualifying for bankruptcy relief based strictly on that individual’s disability income.

After years of seeing local veterans struggle with the effects of mental and physical injuries, this change in income calculation is welcome. Currently, the only way to avoid a means test review for military disability income is to show that the debts sought to be discharged were incurred solely during the time of service. While that is an appropriate exclusion, it misses the cause of the vast majority of service members’ debt. Most service members incur their debt after their service has ended while they fight to obtain disability or to reintegrate into society after service. The current system offers those veterans no relief from the means test exclusion from bankruptcy relief.

The HAVEN act is not a part of the Bankruptcy Code yet, but our office is closely monitoring the progress of this bill to ensure that our veteran clients are fully advised of all options regarding filing for bankruptcy. Our office plans to immediately begin to use the new exclusion for military disability once the change has been enacted in the Bankruptcy Code.

Please feel free to contact us with your questions regarding any bankruptcy related veteran issue. We will be happy to provide a free consultation to advise you of your rights and benefits under the Bankruptcy Code.

Bryan Mickler

bkmickler@planlaw.com or 904-725-0822