Veterans Administration Suspending Debt Collection Action

Some positive news from the Department of Veterans Affairs. The VA is suspending collection actions on all debts where the Department of the Treasury has jurisdiction through the end of 2020, according to a new report. This is welcome news for many Veterans in these hard times. According to the report, any debt to the VA that is over 120 days delinquent falls under the jurisdiction of the Department of the Treasury.

For more on managing this debt, see the VA Debt Management Center.

Rep. Chris Pappas, D-New Hampshire noted that the VA has been trying to collect $1.6 Billion from American Veterans due to overpayments in 2019 alone. Rep. Pappas had introduced a bill in April to temporarily suspend VA debt collection. He has also introduced a bill that would temporarily prevent the Department of the Treasury from pursuing debt collection as well.

The Issue With Overpayment

Rep. Pappas notes major problems with VA overpayments leading to debt collection. For many working Americans, an unexpected influx of cash is quickly spent and Veterans are no different. Unfortunately for Veterans who receive these overpayments, this can be the start of a financial nightmare.

Reporting notes that 600,000 debt collection notices were sent out by the VA concerning overpayments which in some cases were years old. These overpayment debts are especially challenging for Veterans on fixed incomes. These overpayments can also occur when there have been changes in a Veteran’s eligibility for a disability payment or where a  variety of accounting errors by the VA have occurred.

The VA Temporarily Suspends Debts

The July announcement by the VA comes after an April 2nd order by President Trump to the VA to suspend debt collection as well as to extend deadlines related to benefits. The VA had originally suspended debt repayment for G.I. Bill overpayments on April 13th but this new announcement clarifies how long collection of overpayments and debts related to G.I. Bill education programs will be suspended.

The Veterans of Foreign Wars has been working with Veterans in VA overpayment situations and notes that most overpayments stem from Educational Benefits and that in the majority of cases the VFW is able to successfully intervene on a veteran’s behalf. The VFW notes the many ways that slow movement in processing paperwork by the VA can result in overpayment to veterans for a variety of services.

Unfortunately, even when a Veteran does everything required to keep the VA informed of their eligibility status for benefits, overpayments may still result. The VFW notes that partially disabled Veterans who are still serving in either the National Guard or Reserves are at a high risk to receive what the VA considers an overpayment in benefits. These veterans are forced to choose between receiving payment for their National Guard or Reserve service or their disability benefit.

How to Manage Your VA Debt

For those Veterans who have a debt to the VA, the announcement directs them to the VA Debt Management Center. Unfortunately for many Veterans, this suspension is only a temporary reprieve from stress and worry. Many groups have been advocating for the VA to refine its system to prevent these overpayments from being made in the first place and to waive the collection of a debt resulting from overpayment.

If you are being harassed or abused by a debt collector call us at Credit Repair Lawyers of America at (888) 293-2882 or email us at gary@crlam.com.