Debt to the government is very serious business.

It's even more serious when the VA alleges that you owe them money for any reason.

If VA owes you money, they can delay payments to you for years. If you are alleged to owe VA money, whether you do owe it or not, VA will come after you with a fervor usually reserved for radical revolutionaries. VA will haunt you and make your life miserable.

You can avoid all this with a fast response to the VA when you receive any kind of message about debt.

Consumer Debt is as dangerous as debt to the government.

VAWatchdog is  now offering some advice on how to control your debt.

Keep an eye on this page if you have concerns about your debt.

Credit Card Debt

How to dispute charges on your cards. 

Credit card debt. 

Coping with debt.

Financial Troubles Can Hit Anyone: But There’s Hope  

IRS "Fresh Start Program" Offers More Taxpayers Greater Opportunity to Resolve IRS Debts   

Coping With Debt...A Consumer's Guide  

Credit Card Debt

Settling Credit Card Debt 



Beware of Debt Settlement Scams

Some companies offering debt settlement programs may engage in deception and fail to deliver on the promises they make — for example, promises or “guarantees” to settle all your credit card debts for, say, 30 to 60 percent of the amount you owe. Other companies may try to collect their own fees from you before they have settled any of your debts — a practice prohibited under the FTC’s Telemarketing Sales Rule (TSR) for companies engaged in telemarketing these services. Some fail to explain the risks associated with their programs: for example, that many (or most) consumers drop out without settling their debts, that consumers’ credit reports may suffer, or that debt collectors may continue to call you.

Avoid doing business with any company that promises to settle your debt if the company:

    * charges any fees before it settles your debts

    * touts a "new government program" to bail out personal credit card debt

    * guarantees it can make your unsecured debt go away

    * tells you to stop communicating with your creditors, but doesn’t explain the serious consequences 

    * tells you it can stop all debt collection calls and lawsuits

    * guarantees that your unsecured debts can be paid off for pennies on the dollar



President Signs Bill Enhancing Enforcement Of The Military Lending Act  

On January 2, President Obama signed H.R. 4310, the National Defense Authorization Act (NDAA) for Fiscal Year 2013, which includes provisions that enhance federal enforcement of the Military Lending Act (MLA). The MLA (i) caps the annual interest on certain loans to servicemembers at 36 percent, (ii) prohibits such loans from being secured with a personal check, debit authorization, car title, or wage allotment, and (iii) includes other servicemember protections related to the offering of consumer credit.  

How To Negotiate Debt Relief With VA

Your first instinct is to call VA and explain what your side of the story is. That is a mistake and it will cost you. You MUST reply in writing, the sooner, the better.

Why?

First things first. Determine exactly why VA says you owe money. The most common reason is overpayment. This can happen when you've been paid for a dependent who is no longer a dependent or for a benefit that wasn't in effect. You may also have been determined to be a fleeing felon or you may have not satisfactorily completed an obligation as a participant in the GI Bill plan.

Whatever the reason, you must understand precisely what the VA is alleging so that you know how to combat the allegation.

Don't Panic!

To receive a notice that you owe VA a lot of money is sure to get your blood pressure up. Don't allow yourself to panic. Many obligations of debt are errors by VA. If you develop and quickly apply a plan, it's very likely that you'll waste some time playing this game with VA but nothing else will happen. Even if you do owe money the VA waiver options are fairly generous. You just have to know how to get there. If you pay attention, we'll show you.

Learning the language is important. Most debt is created by overpayment.

Overpayment may occur through an error by you or by the government. Either way, it doesn't matter. Once an overpayment is alleged and the government believes that a debt has been created, they will notify you that they want their money back right now.

That a debt was created because of government error does not absolve you of the debt. In most cases, the government will insist you pay the debt once it is established.

The usual routine that occurs is that the veteran will find a letter in his or her mail that notifies them of the alleged debt.

The letters I've seen are often vague with few facts and a few are very precise and state the case clearly.

All of these notices will demand payment in full. They will also notify you of your rights of appeal.

This is the moment most veterans make their first and most damaging mistake...they don't read the letter.

The veteran has numerous rights of appeal. All options for the veteran are "timely". This is very simple to understand; The veteran must take precise actions within clearly defined time periods.

If the veteran does as instructed, there is a greater opportunity to interrupt the debt collection process. Following the instructions and acting within the defined time periods will put the veteran in charge of the entire process. Anything less defaults to the government and the veteran will find that he or she will have almost no control.

For example, the veteran may receive a notice that an overpayment has occurred due to both a pension payment and a compensation payment being made to the vet for a period of time.

The notice will talk about the overpayment and that the government wants a repayment.

There will be a notice that informs the veteran that should he or she disagree with any of this, they may appeal. Appeals must be in writing and must be properly worded.

You must write a letter! 

Your appeal letter must be mailed within 30 days of receipt of the notice of the debt.

How To Submit A Waiver Request 

This is the Notice of Disagreement (NOD) that tells the government that you are disagreeing with their proposal.The letter must state that, "I am notifying you that I disagree with your notice of (date)."
Further, your letter should tell the government that "I request that you make no changes to my payments until such time as all my appeals are exhausted. I wish for a personal hearing before you to review and discuss this matter."

Then you should state, "I request that my issues are reviewed by the Committee on Waivers and Compromises as soon as practicable. It is my desire that this alleged debt be waived in total as any attempt to collect from me will result in severe hardship that will be harmful to my health."

Once you have that letter written, it must be mailed via certified mail, return receipt requested. The letter should be as brief as possible. This is not the time to present your case that the debt is wrong, this letter is only to exercise all your rights.

You will have plenty of time to argue your case once you post this letter. The Committee will want a financial statement from you and there may be a long delay prior to a personal hearing. You bought all this time by your swift response.

DO NOT call the toll free number. DO NOT query the IRIS system. DO NOT run around seeking help from everyone you can think of.

Write your appeal now.

There is only one step to take: Write the letter and get it posted in certified mail. Then wait. Nothing more.

Should you not do this, the system is as automatic as a row of dominoes falling over. The Regional Office that notified you of the debt will turn the case over to The Debt Management Center.

At that moment you've reached a special level of Hell guaranteed to make the first dealings with your Regional Offices look warm and friendly.

You'll discover that the Debt Management Center (DMC) believes that because the RO gave them your case for resolution (collection) that you owe the money. As far as they're concerned, that decision was made at the RO. If you now choose to disagree, the DMC will tell you to deal with your RO. Your RO will tell you that it's in the hands of the DMC.

What happens then?

The DMC begins to deduct all they are able to from your monthly check. If you aren't cooperating with extra payments and communicating effectively, they may quickly sell your account to a contracted debt collection agency.

The collection agency is allowed to begin to add late fees and a whopping interest to past due amounts. It isn't uncommon for that interest to exceed 20% and more...much more.

When you get the notice, read it carefully, then write the letter.

The VA Debt Management Center is here.  


Committee on Waivers and Compromises  


Regional Office Committees on Waivers and Compromises  

Fraud  

If VA alleges that you have falsified data or that you've been knowingly collecting money that you didn't deserve, you need to come to a fast decision. If the allegation is true, you will want to consider a quick plan to repay the debt.

VA can and will prosecute you.

Student Loan Debt for the Permanently and Totally Disabled veteran

In August 2008, the Higher Education Opportunity Act (HEOA) made changes to the Higher Education Act that establish a separate process for determining whether certain veterans are totally and permanently disabled.

Veteran borrowers will be considered totally and permanently disabled for purposes of this discharge if the veteran provides documentation from the U.S. Department of Veterans Affairs showing that the veteran has been determined to be unemployable due to a service-connected condition.

Read more about how the 100% disabled veteran can clear student loan debt by clicking right here.