What is the HAVEN Act?

Congress passed the HAVEN Act in 2019 to provide financial benefits to veterans or their families when filing for bankruptcy.

HAVEN stands for Honoring American Veterans in Extreme Need Act.

This was designed to help all veterans in financial need, particularly those who are reliant on disability benefits. Under this new law, certain payments are no longer counted as disposable income on the bankruptcy means test. So how exactly does it work?

Changes to CMI Calculations

The bankruptcy means test calculates an individual’s current monthly income (CMI) to determine how much financial aid they qualify for.

Any income left over after all “allowable expenses” are covered is deemed “disposable.” Before the HAVEN Act, disability benefits paid by the Veterans Administration or Department of Defense were counted as disposable income.

For wounded veterans or their families, these disability benefits are often not disposable at all. Reclassifying them from “disposable” to “allowable” was an essential step to ensure that veterans are get fair financial compensation.

Some exceptions exist, but the HAVEN Act covers most disability-related benefits paid to veterans or their families. Payments such as permanent or temporary disability pay or disability severance pay fall under the HAVEN Act.

How It Benefits Veterans

The benefit of the HAVEN Act is an easier path to financial recovery through bankruptcy for veterans.

While veterans filing for bankruptcy are in an unfortunate situation, it does happen from time to time. And when this happens, those veterans can get adequate judgment and compensation for their service.

Many veterans receive and are reliant on benefit payments from the VA and DoD. These payments are distributed by the U.S. government in recognition of a veterans’ service to the country.

It made little sense for the U.S. bankruptcy court to then deny exemption for these benefits in court filings. By exempting these benefits, veterans and their families are able to qualify more easily for bankruptcy.

And, once qualified, their debts and expenses are more accurate, resulting in more manageable bankruptcy proceedings.

How It Works

The two types of bankruptcy available to individuals in the United States are Chapter 7 and Chapter 13 bankruptcy. The HAVEN Act applies to both.

So, veterans who file for bankruptcy must simply exclude these benefit payments from their CMI calculation in the bankruptcy means test. In Chapter 7 bankruptcy, the CMI calculation determines eligibility.

In Chapter 13, it determines the individual’s debt repayment plan. Either way, the exclusion of benefits from the CMI provides a more accurate rendering of the veteran’s financial situation.

It is important to note that the HAVEN Act only applies to the bankruptcy means test. It does not create any new exemptions. The trustee overseeing an individual’s bankruptcy filing requires documentation of all income and allowable expenses.

However, under the HAVEN Act, trustees do not request excessive documentation for veterans’ benefits. Such situations may occur where it is necessary to document these benefits, but this is not a regular occurrence.

How to Prepare

Preparing for a bankruptcy filing can be a daunting task. Few individuals have an in-depth knowledge of all the laws surrounding this process. Consequently, filing for bankruptcy without being preparing fully can result in a ruling that does not provide much financial relief.

This would be unfortunate for anybody, but even more so for veterans. Bills such as the HAVEN Act intend to provide benefits, but this only works if veterans know they exist.

This is why it is crucial that anybody considering filing for bankruptcy should hire an experienced attorney beforehand. A bankruptcy attorney can walk you through the process and prepare you for every aspect of the proceedings. Take control of your financial future by finding an experienced HAVEN Act bankruptcy attorney today.

If you are considering filing for bankruptcy, a crucial first step is to hire a bankruptcy lawyer. With an attorney on your side, your future financial security will be in much safer hands.

Discuss your options with one of our bankruptcy lawyers today! To discuss with an experienced attorney, call us at 801-285-0980.

Learn More

At Blue Bee Bankruptcy, our lawyers are highly experienced in the various filing options.

More importantly, we understand that each case we receive is unique. Each client has different needs and goals. We will discuss these signs with you and decide the best route to take.

We strive to help our clients rebuild their lives and take steps toward a better financial future through filing. 


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If you’re dealing with the potential of bankruptcy, give us a call. Our team will work to help you by reviewing all of the options our firm has available. We will ensure you’ll get the best possible outcome for your situation.

Get in touch today so we can start working on either halting bankruptcies or preventing them from taking place altogether!

Contact Us Today For Help! You can schedule your free consultation online or call us at (801) 285-098.


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