The President recently signed a bill that allows veterans to receive disability benefits after filing for bankruptcy. The Honoring American Veterans in Extreme Need (HAVEN) Act, now protects veterans’ disability income so it cannot be seized during bankruptcy.
Disability payments, or income, will no longer be considered disposable income that is subject to creditors.
What types of expenses could lead to bankruptcy?
3 common causes of bankruptcy
1. Medical care costs
Medical expenses are the leading cause of bankruptcy filings in America. Especially as people age, the cost of medical care may drain their bank accounts. Not only is healthcare expensive, but it may also require unpaid time away from work. Even with health insurance, thousands of people are going bankrupt.
2. Credit card debt
Excess spending and over-borrowing are also leading people toward bankruptcy. House payments, car payments, loan payments, in addition to credit card payments may be more expensive than people can afford. Plus, high-interest rates can make paying off debt extra difficult.
Divorce rates for couples 65 and older have been rapidly increasing over the past few years. Getting a divorce can have a huge impact on your finances. Specifically, for people nearing retirement, splitting assets and finances can have a devastating effect.
No matter what the circumstances leading to bankruptcy may be, the HAVEN Act now protects veterans’ disability income. The bill asserts that veterans deserve to receive the benefits they earned regardless of other life circumstances.