How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Terry L. Your Own Question

Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2496
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
Type Your Bankruptcy Law Question Here...
Terry L. is online now
A new question is answered every 9 seconds

Do I have to include my Veterans Disability Compensation as

Resolved Question:

Do I have to include my Veteran's Disability Compensation as income in Chapter 7 or Chapter 13 bankruptcy?

Under Title 38 Section 5301 are Veterans Disability Income and assets purchased from that income exempt from bankruptcy calculations?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 4 years ago.
You would list it in the bankruptcy schedule I.
If the veterans disability income comes from the Social Security Act, then it does not need to be included in the means test calculation.
While Title 38 section 5301 says that they cannot be garnished, it does not state that they are not income for the purposes of the bankruptcy means testing.
Best of luck.
Customer: replied 4 years ago.

You may have not fully read title 38 section a: This is it as follows:

 

USC, Title 38, Section 5301 reads in part; Payments of benefits due or to become due under any law administered by the Secretary shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary.

 

I did not ask about garnishment of benefit. I ask about protection of VA Benefits being exempt in Chapter 13 & 7. Here is my understanding:

 

 

Veterans' service-connected disability compensation is intended to financially compensate a military veteran disabled in the line of duty. This compensation is not an asset, or property, and should not be used to calculate a veteran's net worth. Disability compensation is awarded to a veteran that has lost some/all physical or mental ability to work, or maintain a daily routine. Veteran's disability compensation is tax exempt and not classified as ‘income' by the IRS. VA disability compensation is non-transferable and cannot be awarded to a third party under any legal process whatsoever. Even after the veteran has deposited these funds into their personal bank account they are federally protected from attachment or seizure. Disability compensation belongs solely to the disabled veteran that has suffered the disability.

 

Does this law have to state specifically "exempt from bankruptcy"?

 

Is this part of the law not clear enought "such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary".

 

If not, what does "by any legal or equitable process" mean"? Isn't the Chapter 13 & 7 a legal or equitable process?

 

All the legal opinions that I have found have been wishie washie. They end with the advice "check with a lawyer, with the bar association, with your congressman, with VA and so on & on". Well that is what exactly I have been doing.

 

Since I am not a renowned Judge, Lawyer or Law Maker, my interpretation of the intent of the law is meaningless.

 

Is there anyone with out there with the legal credentials & respect that can help not only me but all veterans?

 

 

 

 

Expert:  Terry L. replied 4 years ago.
I understand what you are asking, and I did read the whole code section you cited. I reiterate that it is referring to creditor attachment, through any legal process, and thus cannot be garnished, attached etc as I explained. However, all income is included in the means test calculation, unless the benefit is specifically derived from the Social Security Act. Means test calculation is just to determine if you are able to pay back debt. That is all. It is not a forced attachment or anything like that. It is just a calculation to see if you are able to pay back a percentage of the debts. The bankruptcy code states:

11 USC Sec 101
(10A) The term "current monthly income"--

(A) means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor's spouse receive) without regard to whether such income is taxable income, derived during the 6-month period ending on--

(i) the last day of the calendar month immediately preceding the date of the commencement of the case if the debtor files the schedule of current income required by section 521(a)(1)(B)(ii); or

(ii) the date on which current income is determined by the court for purposes of this title if the debtor does not file the schedule of current income required by section 521(a)(1)(B)(ii); and

(B) includes any amount paid by any entity other than the debtor (or in a joint case the debtor and the debtor's spouse), on a regular basis for the household expenses of the debtor or the debtor's dependents (and in a joint case the debtor's spouse if not otherwise a dependent), but excludes benefits received under the Social Security Act, payments to victims of war crimes or crimes against humanity on account of their status as victims of such crimes, and payments to victims of international terrorism (as defined in section 2331 of title 18) or domestic terrorism (as defined in section 2331 of title 18) on account of their status as victims of such terrorism.

Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2496
Experience: Better Business Bur 15yrs bankruptcy experience. Chicago Bar
Terry L. and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 4 years ago.

California and Iowa passed laws to clearify the intent of 38 5301 which is where my interpretation was derived.

 

I do appreciate your interpretation and will use it to continue the research into this matter.

 

Thanks,

Ed Warburton

 

 

 

 

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.