1、CRS Legal Sidebar Prepared for Members and Committees of Congress Legal SidebarLegal Sidebari i Veterans Benefits and Bankruptcy Updated January 21, 2020 Federal law entitles veterans to certain types of monetary benefits, such as compensation for disabled veterans injured in the line of duty. Recen
2、t statistics from the U.S. Census Bureau suggest, however, that many veterans with service-connected disabilities fall below the poverty line. One way that a veteran facing severe financial circumstances may potentially obtain relief from certain debts is by filing for bankruptcy. However, bankruptc
3、y relief comes at a cost: debtors must ordinarily sacrifice some of their income or assets to satisfy their creditors claims in whole or in part. From 2005 to 2019, the federal Bankruptcy Code commonly required veterans to relinquish some of their veterans benefits to their creditors in order to obt
4、ain bankruptcy relief. The Bankruptcy Code thereby treated veterans benefits less favorably than Social Security benefits, which federal law typically insulates from creditors claims. Last year, however, in response to calls to amend federal law to shield veterans benefits from creditors, Congress e
