Military members and Department of Defense employees can occasionally find themselves owning a debt to the DoD as a result of the overpayment of pay or allowances, or early separation prior to fulfilling service obligations associated with the receipt of a bonus or incentive.
Debt Notification
Members and DoD employees are often not notified of the debt until years later and, in some cases, after they have left military service or DoD employment. The Defense Finance and Accounting Service (DFAS) will notify the individual of the debt and often demand a lump-sum payment in full, or a monthly payment that is well beyond what the individual can afford to pay.
The debt notification that the individual receives is often very confusing, leaving the individual to guess what exactly caused the debt and whether it is a valid debt in the first place. In fact, there have been countless cases where an individual is informed of an erroneous debt and then asked to reimburse the government for payments that the individual never received. Occasionally, those serving or still employed by the DoD may find that their pay is being garnished even though they have not received formal notification of the debt.
DFAS is required to notify the individual of their due process rights associated with the debt, but often fails to do so. These rights include the ability to request a remission or waiver of the debt, the right to a hearing, to inspect documents upon which the debt is based, and submit a Voluntary Repayment Agreement/Financial Hardship Application.
Responding to an Alleged Debt
If you owe an alleged debt to the Government, it is not something that should be ignored, as doing so will affect your credit score, result in the debt being referred to the Department of the Treasury, and the imposition of interest, penalty and administrative charges. A $10,000 debt could ballon into $25,000 if prompt action is not taken. The government will collect the debt one way or another, regardless of whether it is valid, and will do so on its own terms.
If you have been notified of a debt, it is imperative that you address the issue right away and have a full understanding of the options available to you and how exercising those options will impact whether the government halts any collection proceedings or administrative wage garnishment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
