Orlando, FL asked in Bankruptcy for Florida

Q: Are VA Disability payments exempt from creditor claims (secured or unsecured) in Florida Chapter 13 bankruptcy?

Began Chpt 13 bankruptcy payments nearly a year ago. Subsequently, the VA awarded me 80% disability payments retroactive to before I filed bankruptcy. I'm 74. I posted this question before, and the two lawyers that responded said this income could not be claimed by the trustee to satisfy creditors claims. I've read the statutes. Florida tried to remove this exemption, but reversed itself in later years. My lawyer disagrees and says it is fair game for the trustee and creditors. The VA itself says the income is exempt from creditor claims. Could someone who really knows Florida bankruptcy law just please tell me what the law is? I'm getting monthly payments now and will soon receive a lump sum for retroactive disability payments. Please don't tell me to ask a lawyer because I already have. I just want to know what the law in Florida is with respect to these payments. Thank you.

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2 Lawyer Answers
Clark Dray
Clark Dray
  • Bankruptcy Lawyer
  • Broomfield, CO

A: Sometimes the law is messy and there's no clear answer. While VA Disability is protected under federal and state law, it's not excluded from income for means testing purposes and a Chapter 13 requires that you pay into the plan all of your disposable income. So there's a conflict there that needs to be decided by a judge. There may already be decisions on the topic in your District, which your attorney is probably familiar with, which tell you how the law applies in your case. If not, maybe you're the one who sets it for a hearing.

It sounds like you've already gotten an answer from your lawyer, though. Just because you are hearing different things from lawyers on the internet (who don't represent you and don't have any real interest in doing the research) doesn't mean that your attorney is wrong. Ask him or her explain their position in more detail and then you can make a more informed decision.

Bruce Alexander Minnick agrees with this answer

David Luther Woodward
David Luther Woodward
  • Bankruptcy Lawyer
  • Pensacola, FL
  • Licensed in Florida

A: It appears to me that ALL VA benefits are exempt under Section 222.201, Florida Statutes which reads

222.201 Availability of federal bankruptcy exemptions.—

(1) Notwithstanding s. 222.20, an individual debtor under the federal Bankruptcy Reform Act of 1978 may exempt, in addition to any other exemptions allowed under state law, any property listed in subsection (d)(10) of s. 522 of that act.

(2) The provisions of this section apply to any bankruptcy action that is filed on or after October 1, 1987.

11 USC Section 522(d)(10)(B) says simply "veterans benefits" as exempt.

Seems pretty straightforward to me--how bout you?

1 user found this answer helpful


