DFAS Debt and Claims Management Center

The Department of Defense’s Debt and Claims Management Center collects or settles debts owed to the military by former military members, civilian DoD employees, and certain others. Debts in collections can harm your credit score and make it difficult to get loans or other services. If you receive a debt notification and disagree with it, explore options like waivers and remission.

The Defense Finance and Accounting Service handles a wide range of activities for the military, including paying members their pay and retirement. In addition, the agency is responsible for debt collection. If you get a notice that you have military debt, it’s important to find out more about the situation and how to handle it.

DFAS offers several methods of checking what you owe and your payment status. You can use the Ask DFAS tool to check your status or access information on the DFAS website. The best place to start is by reviewing your DFAS debt notification letter. This will present the total debt amount along with the reason why you have the debt.

It’s also a good idea to consider your options for military debt forgiveness and waivers. Waivers function more like military debt forgiveness than a repayment option, as they allow you to exempt your debt from collection. Review DFAS’ online waiver submission tool to learn more about the various types of military debt waivers.

Why Do I Have a Debt From DFAS

Why Do I Have a Debt From DFAS?

It can be shocking when a military member or retiree learns that they owe money to the Department of Defense. It can also raise many questions about how to pay the debt or whether DFAS forgiveness options exist.

DFAS handles a variety of financial activities for the DoD, including issuing pay and retirement benefits to former service members. In addition to managing payments, DFAS is responsible for settling and collecting outstanding debts.

According to DFAS, out-of-service (OOS) debts are those that accrued while the person was an active duty member or DoD civilian employee and who are no longer receiving employment-related compensation from the government. Once an OOS debt becomes delinquent, it can result in a negative comment on their credit report. This can significantly impact the borrower’s ability to obtain new credit or qualify for lower interest rates on existing loans, says Experian.

The agency has a variety of tools to help OOS debtors manage their repayment obligations, including a reduced installment payment request that can be filed online. The OOS debt department can also provide recoupment financial data to the requesting service unit, which will then handle the individual’s debt management and recovery plan. Depending on the circumstances, a delinquent OOS debt may be referred to collections agencies, which can cause additional harm to the borrower by placing additional negative marks on their credit report.

How to Resolve DFAS Debt Issue

How to Resolve DFAS Debt Issue?

It’s not uncommon for military members and former civilian employees to learn that they owe money to the Department of Defense after leaving the military. This can cause a great deal of stress and confusion. Fortunately, there are many steps that can be taken to resolve this issue.

If you have questions about the amount of debt you owe or believe that the debt should not exist, you can request a hearing. The DFAS Civilian Payroll office will perform an informal reexamination of your pay records, called a reconsideration, before scheduling the hearing. The results of the reconsideration will be sent to you.

NAVMEDAD recoupment actions debts that are incurred due to program participants not meeting the active duty requirements of their HPSP agreement. Typically, these debts are for educational expenses incurred at Wright-Patterson Air Force Base as part of the NSEP program.

DFAS may also refer outstanding debts to private collection agencies, which can have negative remark added to your credit report. This can affect your ability to obtain new credit in the future and impact your ability to rent an apartment or buy a home. You can use the DFAS debt protest submission online tool to address this. Waivers are another option that you can pursue, which functionally act as military debt forgiveness or elimination as long as you qualify.

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