John Thompson Discusses Treatment of Vets’ Benefits in Bankruptcy

November 15, 2018

The November 2018 edition of the American Bankruptcy Institute’s ABI Journal features an article co-authored by McGuireWoods Washington, D.C., partner John H. Thompson examining the inequitable treatment of veterans’ benefits in consumer bankruptcy cases.

In the article, the authors noted that the Bankruptcy Code prohibits filers from excluding U.S. Department of Veterans Affairs benefits from their “current monthly income.” This means the benefits count as disposable income, pushing them to seek relief under Chapter 13 rather than Chapter 7.

By comparison, they noted, Social Security benefits are protected because they are not classified as current monthly income and considered disposable income.

Thompson and his two co-authors are members of the ABI’s Task Force on Veterans and Servicemembers Affairs.

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