Another common question we often hear at LifeBack Law is: Are my veteran’s disability benefits protected? This is a very valid question. Many veterans receive at least something from military disability, while some even have to live off of these payments. So if you are a veteran going through financial struggles, and have questions about your benefits and potential bankruptcy, you’ve come to the right place!
The good news is that VA disability payments, like Social Security and Social Security Disability, is considered “creditor proof.” That essentially means that creditors are not able garnish anything from these payments to satisfy debts owed. No matter how much they threaten to sue, no judge will approve an order allowing them to garnish your disability payments. Even the IRS isn’t able to garnish VA Disability under IRC § 6334(a).
However, that doesn’t mean all of your military benefits are 100% safe. VA disability benefits can be garnished if a veteran is receiving disability compensation in lieu of retirement pay. The portion that a veteran takes in lieu of military retired pay may be garnished. Veterans with child support orders or alimony obligations may also have their payments garnished by the amount of child support or alimony due.
However, if your disability rating is 50% or above and you receive full retirement and full disability, then only the retirement portion can be garnished. To add a slight caveat: there is a process, called apportionment, where your VA disability could potentially be redistributed to address domestic obligations, but that is outside the scope of this article.
CALL NOW FOR A FREE STRATEGY SESSION FROM AN MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM
When it comes to bankruptcy, your VA disability benefits are still protected from creditors and the court. As well as most retirement accounts that you may have from service. So if you are stressing about finances and want to talk to experienced attorneys about the best ways to protect both your benefits and your peace of mind, look no further than Minnesota’s nicest bankruptcy attorneys. We’re happy to answer all your questions and put you at ease. Visit www.lifebacklaw.com and schedule a free consultation with us today!
