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Veteran's Disability Benefits are Not Subject to Liens or Judgments

According to Federal law, Veterans' Disability Benefits are untouchable for purposes of judgments, liens, and levies. Veterans Disability Benefits are "exempt from taxation . . .claims of creditors, and . . . not . . . liable to attachment, levy, or seizure . . . under any legal or equitable process whatever be divided for any reason . . ." 38 USC § 5301(a)(1). Furthermore, even if a Veteran contractually assigns his rights to the Disability Benefits, the assignment is void. See 38 USC § 5301(a)(3). California courts have reportedly not followed these principles in allocating assets in a divorce, and for purposes of determining income. In October 2009 the Wright Veterans Disability Benefits Act (Senate Bill 285) passed. California Code of Civil Procedure Section 483.013 was subsequently amended to say "federal disability benefits awarded to veterans for service-connected disabilities
pursuant . . . shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatsoever, as provided by federal law. . ." Now, California law clearly follows Federal Law, and no Court, through an order, or through a settlement decree is entitled to redistribute Veterans' Disability Benefits, unless the benefits were elected in substitution of retirement benefits as outlined in 42 U.S.C. 659(h)(1)(A)(ii)(V).

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