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socrateaser, Lawyer
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Experience:  Retired (mostly)
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I am in Chapter 13 bankruptcy and just found out that the VA

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I am in Chapter 13 bankruptcy and just found out that the VA will pay me a lump sum payment of 56,000 dollars for service connected disability due to agent orange exposure. Is this payment subject to bankruptcy rulings or is it exempt under USC Title 38 Section 5301(a)? Also, the VA has rated me as 90% disabled due to this heart condition. Is my increased monthly disability rate factored into my Chapter 13 payments? Thank You
Submitted: 5 years ago.
Category: Legal
Expert:  socrateaser replied 5 years ago.
The benefits are exempt, under 38 USC 5301, unless and until applied to a permanent investment, such as a house. Carrier v. Bryant (1939) 306 U.S. 545, 547-549.

So, if you can hold off on receiving the money until after your Chapter 13 is completed, you may be able to avoid a dispute with the trustee.

Hope this helps.

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