The HAVEN Act and Bankruptcy in Nebraska – How Veterans Can Protect Their Benefits
You served our country with honor. When financial hardship strikes back home, you deserve a legal system that honors your service in return.
At John Turco Law, we understand the stress, confusion, and frustration that financial problems can cause—especially for veterans and their families. For many Nebraska veterans, a critical piece of protection now exists thanks to a law called the HAVEN Act. This guide will explain how that law can help you protect your VA benefits and secure a real financial fresh start.
How Veteran Benefits Complicated Bankruptcy Before the HAVEN Act
If you’re a veteran or active-duty military member considering bankruptcy, one of the biggest hurdles is something called the Means Test. This test decides whether you can file for Chapter 7 bankruptcy, which eliminates most debts or whether you’ll be required to file for Chapter 13, which involves a multi-year repayment plan.
Before 2019, the problem was this:
Your military benefits were counted as income, even though they were meant to support your service-connected injuries or retirement. This often made it look, on paper, like you were earning far more than you actually were.
How the HAVEN Act Changed the Rules for Nebraska Veterans
In 2019, Congress passed the Honoring American Veterans in Extreme Need Act—known as the HAVEN Act. This law made a powerful and long-overdue change:
It excludes VA disability and other military benefits from the Means Test calculation.
That means when calculating your “current monthly income” for bankruptcy purposes, protected military benefits no longer count.
What This Means for You:
- Lower income on paper
- Greater chance of qualifying for Chapter 7
- A faster, cleaner path to debt relief
Before vs. After: How the HAVEN Act Affects the Means Test
Means Test Comparison Table:
| Income Type | Before HAVEN Act | After HAVEN Act |
|---|---|---|
| Job Income | Counted | Counted |
| VA Disability Benefits | Counted | NOT Counted |
| Military Retirement | Counted | NOT Counted |
| Result | Higher “paper” income | Lower, more accurate income |
Is Your Military Benefit Protected? A Checklist
The HAVEN Act specifically names the types of income that are now excluded from bankruptcy Means Test calculations.
Note: Civilian job salaries, income from self-employment, and non-military pensions are not protected by the HAVEN Act.
Case Study: How the HAVEN Act Helped a Local Veteran
Meet “David,” a U.S. Army veteran living in Omaha.
Household size: 1
Monthly income:
- Part-time job at Menards: $3,500
- VA Disability Compensation: $2,800
Before the HAVEN Act:
$3,500 (job) + $2,800 (VA) = $6,300/month
This total income would exceed Nebraska’s median income for a household of one (around $5,700/month). That means David would not qualify for Chapter 7.
After the HAVEN Act:
$3,500 (job) + $0 (VA is excluded) = $3,500/month
David’s true income is now reflected correctly. He qualifies for Chapter 7 bankruptcy.
The HAVEN Act has changed the game for veterans—but understanding how to apply it correctly in bankruptcy is crucial.
At John Turco Law, our attorneys have helped thousands of Nebraskans—including disabled individuals, unemployed workers, and veterans—successfully navigate bankruptcy. We know the law. We understand the stress. And we’re here to help you move forward.
Schedule a Free Consultation Today
Whether you’re receiving VA Disability, Military Retirement, or other protected benefits, we’ll give you straight answers about your rights, your options, and how the HAVEN Act can protect your future. Schedule a free consultation today.
You protected our country. Now let us help protect your benefits.
