Many veterans today are making the decision to file for bankruptcy but what they may not know is that filing for bankruptcy may force them to give up some of their benefits. If you’re considering filing for bankruptcy as a veteran it’s important to consider your current level of debt as well as what you could be losing if you were to file.
Disability benefits and other veterans benefits may not be considered taxable income and in most cases they are considered to be a disposable income in bankruptcy filing. Veteran disability benefits however are not considered as part of bankruptcy and this means that disability benefits could be considered as part of disposable income. This could mean that a debt collector may seek payments out of your disability in order to get their repayment.
There are a number of bills being drafted that are working to help veterans to avoid a situation where there disability benefits could be garnished as a result of debt repayment. Before this legislation is put into place, there is currently no form of protection against veterans disability payments being collected for debt repayment.
If you are a veteran and you currently accept disability payments you may want to consider all of your options before you look into bankruptcy. Speaking to a bankruptcy attorney will help to let you know more about what you might expect if you were to file for bankruptcy. Understanding the types of garnishments that you could face and how much of your benefits could be lost may be important to avoiding unfortunate consequences in the debt relief process.
This post was written by Trey Wright, a bankruptcy lawyer in Tallahassee. Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.