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Haven Act and Lump Sum VA Disability payment

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    Haven Act and Lump Sum VA Disability payment

    Has anyone received a lump sum payment for VA disability back pay since the Haven Act was passed? I'm in a Ch 13 plan that was confirmed in Oct. 2019 and I'm expecting to receive a large sum in back pay for VA disability and I'm wondering if I will be required to hand it over to the trustee. Anyone have any knowledge on this issue?

    #2
    It would be interesting to know, but the Haven Act is so fresh and new that there isn't much case law. Generally, though, VA benefits are protected. I am posting only what I know today, and hope that someone responds to your question. The Haven Act didn't specifically address lump sum exemptions; it merely changed the definition of current monthly income (CMI) in the bankruptcy code.

    Since I think that the pre-Haven Act laws already protected VA benefits from levy or seizure, it may not be an issue.

    I don't think Chapter 13 Trustees are as adventurous or litigious than Chapter 7 Trustees. To that point, the Trustee could argue that the back-pay is "income" and that it's subject to turnover. They could argue, incorrectly, that the Haven Act is not retroactive (yeah, it doesn't say it in the text, but the "history" from Congress is that it being retroactive was the intent). It's just that not many cases have come up where we have caselaw to see "look at John Doe vs. Evil Trustee 10 B.R. 1955" or something like that. Since the Haven Act removes VA benefits from the definition of income, that should address that portion.

    I would still look to some attorney(s) that may now have more relevant experience.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    I am not an attorney. Any advice provided is not legal advice.

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      #3
      Justbroke, I was hoping someone, with a similar situation, would have responded by now. I left a message for my attorney to give me a call. Hopefully, he will have some information.

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