How to Fight VA Debt

The Department of Veterans Affairs says you owe them money. You disagree. But how do you fight Uncle Sam when he comes for your cash?

If there's one thing military members know, it's that when the Defense Department gives you too much money, it will come back for it eventually.

The VA is similar, but the system is worse. That's because, thanks to the many different levels of cash benefits and payments offered through a convoluted system, it can be exceptionally easy for veterans to get overpaid without realizing it's happening or truly understanding the consequences. It's also very easy for the VA to simply try to collect debt it's not actually owed thanks to paperwork errors.

But what most often causes the debts, and how can a veteran fight them or the collections process that often results?

According to officials with veteran service organizations, the solution has two parts: speedy reaction, and asking for help.

VA Debt: Likely Causes

Veteran debt to the VA--or incorrect VA claims about debt--can be triggered by a whole host of accidental overpayments or paperwork errors. But there are a few types of problems that are especially common, officials with veteran service organizations said.

If a veteran is receiving compensation or pension based on their net worth, and that net worth changes but the VA isn't updated its records, the veteran can easily end up overpaid.

By law, veterans are not allowed to receive both VA disability compensation and a military paycheck from the Defense Department. That means if a veteran who receives disability payments returns to active duty or drill status in the Guard and Reserve and his or her VA payments aren't altered to offset that income, overpayments can stack up quickly. Sluggish paperwork processing also often contributes to this overpayment snafu.

Veterans who get divorced or have a change in marital or dependent status without notifying the VA can also easily get overpaid.

Overpayments are also common for veterans who find themselves in legal trouble, thanks to rules concerning VA pay and criminal convictions.

Widows often find themselves subject to VA debt collection after their veteran dies. Disability pensions are to stop on the day of death, but if a widow does not notify the VA that the veteran has died and that money continues to be paid, the VA will eventually come back to reclaim it.

Finally, the VA considers the veteran responsible to repay any money that is incorrectly given to his or her school through the GI Bill. That means if a school incorrectly accepts VA funds, the student must pay it back. If the school won't refund the student, that veteran could then be out thousands of dollars with no recourse.

VA Debt: Don't Wait to Respond

The VA worked through 600,000 debt cases last year, veteran support officials report. That's a lot of money problems.

And officials with the American Legion have helped veterans work through so many debt letters that they didn't have quick access to a full tally, they said.

But because of that, they know one action item is key: don't wait to deal with it.

"The biggest point I'd like to make is that [veterans] need to meet that first deadline," said Jim Vale, the Legion's assistant director for claims. His office works with the Legion's representatives nationwide to help veterans deal with VA debt problems.

Each debt letter or collection notice has two waiver deadlines: a waiver of collection deadline 30 days after the first notice, and a waiver of debt due to administrative error or financial hardship at 180 days.

Veterans need to work to make that first 30-day deadline, Vale said.

During that window, the collection process is at the VA Debt Management Center. But after 30 days it is filtered down outside the VA to the Treasury Offset Program, where the collections process is initiated by the U.S. Treasury Department.

There is much more flexibility with appeals received during that 30-day window, he said. Getting an appeal in right away can help a veteran avoid paying while the debt is being fought.

But Vale finds that veterans often miss that first deadline.

"A lot of times they miss that 30-day deadline, and then the VA's hands are tied," he said. "They need to request that before the 30 days."

Veterans can still request a waiver and maybe even get one up until 180 days after the notice, but it gets harder, he said. Once it's sent to the Debt Management Center after the initial 30 days, the veteran will likely have to pay the debt whether he is fighting it or not, and then, if the battle is successful, get the money back later.

VA Debt: Ask for Help

Veteran service organizations such as the American Legion or the organization Veterans Education Success exist for one reason, officials who work for them say: to help veterans.

Those organizations have people on staff whose only job is assisting veterans with VA-related questions, including debt appeals.

Vale said veterans do not need to be Legion members to tap into their service officer network. And they can get expert help appealing their debt by simply getting in touch with their regional Legion Service Officer, Vale said.

"When they call their service officer ... just say 'I have an overpayment, I need to request a waiver and I have a deadline,'" he said.

Officials with Veterans Education Success specialize in GI Bill overpayment problems. They said veterans who have debt issues specific to the GI Bill can call them for help.

"My advice is that they should be in contact with us, and we can try to help them," said Carrie Wofford, the organization's president.

This article was edited to clarify which agency collects debts for the VA.