Receiving a debt notification is a high-stress situation for most. Knowing whether, what, and where to turn with all of your questions, documents, and applications can add even more stress. But in many cases, it is possible to challenge the debt. Effective legal arguments may be available to reduce or eliminate the amount you owe.
Phase One: Understand the Debt
Whatever your status, or whether you intend to request review, waiver, or remission, the process begins with gathering as much information about your debt as possible. You are entitled to information on the reason for the debt as well as the evidence supporting the debt from the collecting agency (DFAS).
Review your debt notification letter.
On the first page, a three-letter code indicates the type(s) of debt. Here are some examples of debt codes:
| DFAS Code | Debt Type |
|---|---|
| AOP | Retired pay arrears of pay |
| CAB | Retired pay, not entitled to |
| CIV | Civilian Pay Debt |
| DCK | Duplicate Payments Received |
| DDS | DoD Dependent Schools |
| DTY | Do It Yourself Move |
| GPL | Loss or Damage of Government Property |
| HED | Disenrollment from Military Health Professionals Scholarship Program |
| HHG | Household Goods |
| HSP | Hospital Expenses |
| LOF | Loss of Funds or Dishonored Personal Check |
| MBA | Defaulted Loan |
| MBB | Overdraft Debt |
| MBC | Insufficient Funds |
| NES | Tuition Assistance, National Security Education Program |
| RED | ROTC Education Tuition Assistance |
| RSH | Reserve/National Guard Bonus Recoupment |
| RSO | Report of Survey (Damage or loss of government property) |
| TVL | Overpayment of Travel Entitlement or Nonsettlement of Advance |
Request Evidence Supporting the Debt
Request all records related to your debt from DFAS or other collecting agency. So long as you request supporting evidence within the 30-day window, the Government will usually stop any collection efforts during the decision-making process. This 30-day period is calculated from the debt notification letter date of issue, not the date you received the letter.
If you are currently in the military:
The process of responding to the alleged debt may be service-branch specific. You may contact your local finance or payroll office or unit administrator to discuss the debt. They should provide information on the basis for establishing the debt and how the amount was calculated. You are also entitled to contact DFAS (or other collecting entity) directly to request the evidence they have to support the debt.
If you are no longer in service:
Separated members will likely receive a notice of the alleged debt from the accounting agency (e.g. DFAS). Request information about your debt directly from DFAS, including all evidence they have to support the debt.
Retired servicemembers may be directed to the Retired Pay Office for information on the cause of and reasons for the debt. You can still request evidence from DFAS (or other collecting entity).
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Next Steps: If the Debt Is Invalid or the Amount Is Incorrect
Request a Review to Dispute the Debt
You may request a review if you disagree with the validity of a debt or the amount of a debt.
It is important to submit your request for review within 30 days of the issuance of the original debt notification letter (calculated by date of issue, not date of receipt). You need to support your dispute with evidence, so it is critical that you respond quickly and request the supporting documents from the service branch.
However, if you miss the 30-day deadline and/or you do not get confirmation that the collection process has stayed, you will be expected to make payments during the adjudication process.
If you fail to make payments, then the debt may be referred to the US Treasury where there can be extreme penalties and interest: potentially adding tens of thousands of dollars in fines to the debt. Ultimately, this could lead to garnishment of your wages and/or referral to a private collection agency.
If you are successful in challenging the debt, the payments you made should be returned to you after the favorable adjudication.
Next Steps if the Debt Is Valid, but Seeking Repayment Would Be Unfair, Unjust, or Otherwise Inappropriate in Your Circumstances
A successful waiver or remission application package will be supported by evidence. The documents or items required can vary depending upon the nature of the debt, and whether you are seeking a waiver or remission.
Applying for Waiver of a Debt
A waiver is an act of the government to intentionally relinquish its claim against an individual for a debt resulting from erroneous payments of pay or allowances. If you believe that the debt is valid but there are circumstances that may warrant the government forgiving all or part of the debt, a waiver may be an option.
To be eligible for a waiver, the debt must be the result of an erroneous payment (pay or allowance). The government may waive a debt in whole or in part if collecting it would be “against equity and good conscience or would be contrary to the best interests of the United States.”
Generally, servicemembers must submit a waiver application to the accounting service (DFAS) within five years of the date the debt was discovered by a pay official. DFAS does not process waivers for the following agencies; contact your agency for the proper procedures:
- USCG
- VA
- DODEA
- DIA
- HHS
- EPA
- NSA
Applying for Remission of a Debt
Remission is the cancellation of a debt or portion of a debt by the secretary of a military department. This option is available to active-duty military members or former military members who have incurred an active-duty debt. The laws governing remissions may consider financial or personal hardship, a member’s value to the service, compassion, justice and good faith.
Remission applications are submitted directly to the service branch and are considered on a case-by-case basis. The Army uses DA Form 3508; the Navy, Air Force, Space Force, and Marine Corps use DD Form 2789. Remission requests must include supporting documentation, including but not limited to LESs (Leave and Earnings Statements), any forms that authorized the payments resulting in debt, your justifications for seeking remission.
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Waivers vs. Remissions: Key Considerations
The laws governing waivers and remissions differ between branches but follow the same basic standards. Consider the following factors when deciding whether to apply for a waiver or remission.
Order of Operations
You cannot apply for a waiver and seek a review at the same time. By submitting an application for a waiver, you must acknowledge that you are not disputing the validity or the amount of the debt. If you do wish to dispute the debt validity or amount, seek review first.
Awareness of Erroneous Payments
Adjudicators take into consideration whether or not the servicemember should have been aware they were receiving erroneous payments. In some cases, a service member may receive relatively small erroneous payments over an extended period of time which add up to a considerable debt. It may be possible to argue that it would be unfair to seek recoupment, as the servicemember was not at fault and it is reasonable that they did not catch the error. However, if the adjudicator finds that the servicemember should have realized the error, and thus inquired about the payments, waiver will likely be denied.
Reasons for Unfulfilled Service Obligation
If a servicemember enters into a contract to provide service in exchange for a stipend, educational pay, or other benefit, failing to fulfill the service obligation will result in a debt. This is common with ROTC contracted cadets and SMART scholarship recipients. However, the reasons the servicemember was unable to fulfill the conditions of the contract are taken into consideration. It may be possible to eliminate the debt if the reasons for not fulfilling the conditions of the benefit were beyond the servicemember’s control, such as a medical discharge.
| Dispute/Review |
|---|
| The debt is invalid, and… |
| – You disagree with the debt or the amount of the debt |
| – You can provide evidence showing that the debt is erroneous |
| Waiver |
| The debt is valid, and… |
| – It would be unfair or unjust to collect on the debt |
| – You agree to the validity of your debt |
| – Debt resulted from erroneous payments of allowances, reimbursements, or salary |
| – The payment error was not your fault, and it is reasonable that you were unaware of/did not report the discrepancy |
| – Your request was submitted within five years of debt discovery |
| – You can provide supporting documentation |
| Remission |
| The debt is valid, and… |
| – Your debt was incurred while on active duty |
| – Severe financial or other personal hardship would make collecting on the debt inappropriate |
| – If the debt resulted from failure to meet service obligation, the failure was not due to circumstances within your control |
| – Remission would be in the interests of compassion, justice, good faith, and/or recognition of your value to the service |
| – You can provide supporting documentation, such as evidence of financial hardship |
| – You can obtain your Commander’s signature (Required for Space Force, Air Force, and Navy active duty and reserves) |
If you have grounds to challenge your debt, are unsure of your best options, or have no idea where to begin, it is highly advised to consult an attorney with proven success in military debt matters. With careful attention to administrative procedures, and a compelling argument grounded in evidence, it may be possible to reduce or eliminate your obligation to repay your debt to the government.
The Military Law attorneys at Tully Rinckey PLLC were service members long before they became lawyers. They know the military, they know the law, and they are ready to fight hard on your behalf. To discuss a potential case, please call 8885294543 to schedule a consultation, or schedule a consultation online.
Heather Tenney, Esq., LL.M. is a Partner in Tully Rinckey PLLC’s military law, federal employment, and national security law practice groups. She currently serves as the primary attorney for consultation in these areas. Heather brought her skills as an advocate and negotiator to Tully Rinckey after honorably serving with the US Army’s JAG Corps, and the results speak for themselves. At the firm, she focuses on military law; federal employment, EEO and discrimination litigation; disciplinary investigation and MSPB litigation, disability retirement, and national security clearance representation. Heather’s representation in national security and security clearance cases range from high-level military officers to covert operation officers of the CIA, NRO, FBI, DIA and a range of other intelligence agencies. Heather currently serves as Treasurer for the National Security Lawyers Association (NSLA).
