Bipartisan Reform Amends Current Bankruptcy Law to Better Support Veterans
and Their Families Experiencing Financial Hardship
WASHINGTON, D.C. [03/07/19]—Today, U.S. Senator Tina Smith (D-Minn.) pushed for reforms to current bankruptcy law in order to protect veterans experiencing financial hardship in Minnesota and across the country.
The bipartisan Honoring American Veterans in Extreme Need (HAVEN) Act, led by Sens. Tammy Baldwin (D-Wisc.) and John Cornyn (R-Tex.) excludes Veterans Affairs and Department of Defense disability benefits from veterans’ monthly income calculations, preventing those funds from being taken by creditors.
“Disability benefits are not a luxury. They are essential for ensuring veterans are compensated for serving our country and making sacrifices,” said Sen. Smith. “The benefits that veterans have earned should never be considered ‘disposable income’ that creditors can seize, and I’m proud to support this effort to have our laws reflect that.”
“As a longtime advocate for the financial well-being of military families, I was surprised and dismayed to learn that a flaw in the bankruptcy code was denying disabled veterans the protections that it offered to all other Americans receiving disability income. The HAVEN Act fixes that flaw, and I’m happy to join its many bipartisan co-sponsors as an individual sponsor of the bill,” said Holly Petraeus, former Assistant Director of the Consumer Financial Protection Bureau, Office of Servicemember Affairs. “As someone who has spent her life in the military community, I know that many veterans have paid for their dedicated service with lifelong disabilities. And it should be a priority for all of us to see that they are treated fairly under the law.”
“Paralyzed Veterans of America commends Senators Baldwin and Cornyn for introducing the Honoring Veterans in Extreme Need (HAVEN) Act,” said Susan Prokop, National Advocacy Director for the Paralyzed Veterans of America. “This legislation corrects a glaring inequity in the treatment of disability benefits under bankruptcy laws and will protect the economic security of countless vulnerable veterans with disabilities.”
“DAV is proud to support the bipartisan HAVEN Act in order to protect disability compensation during bankruptcy proceedings,” said Joy Ilem, DAV National Legislative Director. “The HAVEN Act would exclude disability compensation when bankruptcy courts determine how much a veteran must pay to creditors, in the same way that Social Security disability payments are already excluded. We commend Senators Baldwin and Cornyn for introducing this legislation to protect some of our most vulnerable disabled veterans who have already given so much in defense of our nation.”
The HAVEN Act follows recent congressional efforts to combat servicemember and veteran mental health issues, addiction, suicide, poverty and homelessness—all of which are exacerbated by financial hardship. This legislation is supported by 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.
In addition to Sens. Smith, Baldwin, and Cornyn, the bill is also supported by Sens. Jon Tester (D-Mont.), Johnny Isakson (R-Ga.), Doug Jones (D-Ala.), Thom Tillis (R-N.C.), Dianne Feinstein (D-Calif.), Joni Ernst (R-Iowa), Patrick Leahy (D-Vt.), Chuck Grassley (R-Iowa), Kevin Cramer (R-N.D.), Dick Durbin (D-Ill.), Jerry Moran (R-Kans.), Amy Klobuchar (D-Minn.), Tom Cotton (R-Ark.), Tammy Duckworth (D-Ill.), Marco Rubio (R-Fla.), Jeanne Shaheen (D-N.H.) and Mike Rounds (R-S.D.).
You can access more information about the HAVEN Act here and full text of the bill here.
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