Baldwin, Cornyn legislation to Support Veterans Experiencing Bankruptcy Passes House Judiciary Committee

Statement

U.S. Senators Tammy Baldwin (D-WI) and John Cornyn (R-TX) released the following statements after their Honoring American Veterans in Extreme Need (HAVEN) Act passed the House Judiciary Committee:

"Forcing our veterans and their families to dip into their disability-related benefits to pay off bankruptcy creditors dishonors their service and sacrifice. I'm glad to see this important bipartisan legislation move forward in the House today," said Senator Baldwin. "These benefits are earned, and we must do right by our veterans and safeguard the disability benefits our veterans and their families depend on and provide the financial security they deserve."

"Veterans with disabilities deserve the hard-earned benefits they receive after serving our country," Senator Cornyn said. "By protecting their disability compensation during bankruptcy, we can help them and their families regain financial stability."

The HAVEN Act passed the full Senate last month as part of the National Defense Authorization Act of 2019. The bipartisan reform would protect the economic security and well-being of veterans and their families who rely on disability benefits and may be experiencing financial hardship.

Under current bankruptcy law, disability benefits paid by the Department of Veterans Affairs (VA) and Department of Defense (DoD) are included in the calculation of a debtor's disposable income, increasing the portion of the debtor's income that is subject to the reach of creditors. By contrast, bankruptcy law explicitly exempts Social Security disability benefits from this calculation. To remove this unequal treatment among various disability benefits, the HAVEN Act would exclude VA and DoD disability payments made to veterans or their dependent survivors from the monthly income calculation used for bankruptcy means tests.

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