Chapter 7 Bankruptcy for Veterans: Key Benefits and Protections
Chapter 7 bankruptcy can be a useful solution for veterans with financial struggles. However, veterans have a few unique considerations. If you're a veteran, it's important to know all the factors before choosing liquidation bankruptcy.
The Craig Black Law Firm has worked with veterans and understands the unique challenges they face when it comes to managing their debt. If you're a vet considering bankruptcy, call me at 678-888-1778. When you call my office, you can rest assured you'll speak to me personally. You can also fill out my confidential contact form.
Bankruptcy Protections for Military Veterans
Filing for Chapter 7 bankruptcy means eliminating eligible debts in return for assets being seized. But while the typical filer has to worry about losing jewelry and antiques, military veterans may qualify for asset protection.
Each state has homestead exemptions that apply to Chapter 7 filers, and that can help them keep a certain amount of cash or property necessary to live and work. However, for military vets, the list of exemptions is longer in some states, so it's important to check local laws before you file.
Means Test and Veterans
Veterans may find it easier to qualify to file for Chapter 7. This relates to the means test, which is an essential component. To qualify to file, your household income will need to fall below the median for your state, but as a veteran, you may be able to file even if your income is above the median. Veteran exemptions apply to:
- Veterans who became disabled while in the line of duty.
- Members of the Reserves or National Guard who file for bankruptcy and serve at least 90 days. You'll need to file within 540 days of your release to be exempt.
Protection of Veterans Benefits
As a military veteran, you may receive pensions and other income, and filing for Chapter 7 could have you concerned. Any income will be treated as such for the means test, and the funds in your bank account could be seized, depending on local laws and exemptions.
However, as a veteran, you may benefit from something called the Honoring American Veterans in Extreme Need (HAVEN) Act of 2019. This act protects the following veteran benefits during a Chapter 7 bankruptcy filing:
- Disability and death benefits for veterans and their families
- Monthly compensation for catastrophic injuries or illnesses
- Combat-related special compensation
- Disability severance pay
- Disability-related military pay
It's important when receiving exempt funds that you keep documentation. If possible, separate the money from other funds in your bank account. Commingling exempt and nonexempt funds could result in exempt money being seized. If that happens, the Craig Black Law Firm can help you straighten matters out.
How the Craig Black Law Firm Helps Vets
The Craig Black Law Firm has experience helping veterans file for Chapter 7 bankruptcy. If you're a veteran considering filing, give me a call at 678-888-1778 or complete this contact form.