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What Service Members and former Service Members Need to Know About Government Debt Collection

Service members are entitled to pay and various allowances and benefits, as well as special incentives, scholarships, or bonuses. However, sometimes errors or changes in circumstances could prompt the government to seek to recover the value of that benefit, commonly called recoupment. Knowing what to do if you receive notice of a debt or money being deducted from your pay can help you avoid errors that could cost more than what was originally owed, or even prevent the recoupment. The focus of this article will be on some common types of debt; the process of seeking to dispute, waive, or remit the debt; and the overall best practices if the government is seeking recoupment or repayment.

Alleged debts can come from various sources, so the first thing you need to do is understand why you are in debt. If you are currently in the military, you should direct your questions about the reasons for or validity of the debt to your local finance or payroll office. If you are no longer in service, you will likely receive a notice of the alleged debt from the accounting agency (i.e., DFAS), and you will need to request information to determine the nature of or reason for the debt and the evidence supporting its validity. You must understand how the debt came about, why you were placed in debt, and the accounting of the amount of the debt to determine the best course of action. The debt could be a result of an overpayment; an erroneous payment or allowance; alleged misconduct; or recoupment of a bonus, scholarship or educational debt, among many other sources. Repayment or recoupment will often be sought, even if the debt was caused by government error. Ignoring these notices will not make the circumstances better. Quick action is often your best friend in these cases.

If you are still in military service, your service branch will be seeking to collect the debt, and the process to seek either waiver or remission may be service-branch-specific. If you have separated from service, then you will receive notice from your organization through their accounting agency (i.e., DFAS). Deciding what to do and how to do it will depend on (1) whether you are challenging the validity of the debt; (2) your status; and (3) your service branch.

If you disagree with the validity of a debt, you may request a review. It is important to submit your request for review within 30 days of the issuance of the original debt notification letter. You may need additional information to support your dispute from the service branch, so it is critical that you respond quickly and request the supporting documents from the service branch. This may be an audit or just a request for the relevant documents. If this is done timely, then the government will usually stop any collection efforts during the decision-making process. 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 and the government could add tens of thousands of dollars in fines to the debt. If you fail to make payments, then the debt may be referred to the US Treasury where there will be extreme penalties and interest assessed and ultimately 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 will often be returned to you after the favorable adjudication.

If you are still receiving compensation from the government, then debt payments will be deducted from your pay, and this also means that you may be entitled to request a hearing to dispute the debt.

If you believe that the debt is valid but there are circumstances that may warrant the government forgiving all or part of the debt, you may want to seek either a waiver or remission. 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. To be eligible for a waiver, the debt must be the result of an erroneous payment of pay or allowance. The government may waive a debt if collecting it would be “against equity and good conscience or would be contrary to the best interests of the United States”. A debt may be waived in whole or in part. Generally, military claimants must submit a waiver application to the accounting service (DFAS) within five years of the date the debt was discovered by a pay official.

Remission is the cancellation of a debt or portion of a debt by the secretary of a military department. Remission is applicable for 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.

Whether you are disputing the debt, seeking a waiver, or applying for remission, you will need to support your request. You will need to offer evidence, and the types of documents or items you submit can vary based on the nature of the debt and whether you are seeking a waiver, a remission, or a review.

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 your request for a review is unsuccessful, you could then request a waiver or remission, but submitting a waiver application first waives your right to dispute the validity of the debt or amount in the future. When presented with a debt notification, knowing whether, what, and where to submit your matters can be complicated. There are often many potential legal defenses and arguments that can influence the choices you make and the end result. Speaking with an attorney who has handled similar cases can help ensure that your rights are protected, that you do not make serious mistakes, and that you have the best chance of success.

Heather Tenney, Esq. is a Partner in Tully Rinckey PLLC’s military and national security law and the federal employment law practice groups. Heather possesses years of experience representing officers and enlisted service members in complex legal matters, including courts-martial, adverse command actions against troops such as administrative separations, Article 15 matters, and other forms of non-judicial punishments. She also served as a Claims Attorney with the US Army Claims Service and was responsible for adjudicating torts claims filed against the Army. She can be reached at (888)-529-4543 or at

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