I'm trying to get out of the Army in a timely manner, but there's a debt in my way. How should I proceed?

CPT Private RallyPoint Member — Mon, 11 Mar 2024 14:53:12 -0400

Link to previous post: https://www.rallypoint.com/answers/leaving-the-army-before-end-of-debt-repayment

BLUF: The end of my service obligation is coming soon (in 3 months), but thanks to a large debt that my higher command created by overpaying me following a deployment, I find myself facing a dilemma. I feel that I'm stuck between being forced to stay in the Army for something that isn't my fault or trying to get out as close to the end of my service obligation as possible, but risking not getting the debt taken care of before my time's up.

In a previous post, I mentioned that I found myself saddled with a 5- figure debt following a deployment. The handling of our finances by our higher command was... unsatisfactory to put it politely.

Now that the dust has settled somewhat, the source of the debt (an overpayment) has gotten a little clearer, but the way forward hasn't. My finances are in a good enough place that I could pay off the entire debt immediately, but that's apparently not an option I can just choose like I could with my taxes or my GTC. Instead, I've been put on a payment plan that has me drilling for a little less than a quarter of my base pay. According to this payment plan (the exact details of which have not been disclosed to me), it would take me almost two years to pay off the debt, meaning my plans to get out on time would be out the window. This is a problem for me because my intent is to start working on the German economy full- time, which is a problem if I have to disappear once a month to go to drill and then take two weeks off every summer. I don't live near a military installation and have no intentions of working for the Army as an LN, so I would have no USERRA protection.

I have been in contact with my unit's S-1 on a weekly basis for the last 3 months and both my BN and BDE command teams are involved in this as well. That being said, I have received pretty much zero communication from our command's finance team on the matter during this time, nor did they ever once reach out to me regarding the debt when the issue first came to light.

I spoke with DFAS about options to repay the debt in full, but they said that could result in an over collection, which I would then have to fight the Army for to get back.

My patience with the command has just about run out and I'm starting to get the impression that we are having to do more work than our command is to get this fixed even though I had nothing to do with the screwup. My question, then, is this: What can I do? All I want to do is pay off my debt in full and get out when my service obligation expires. In light of how this matter has been handled until now, I'm considering filing a Congressional. Is there anything else I can do to make this process less painful?

If I were to leave the Army without having completely repaid the debt for a miscalculated REFRAD,...

Evening, all... Trying to get a feel for what to expect for the future. Here's a short version of my situation for context: I returned from a mobilization a few months ago and, when I checked my LES at drill, I was shocked to find that a 5- figure debt had appeared out of nowhere. Naturally, this raised a lot of alarm bells, as there was nothing I could have done between the end of my mobilization and the time I checked it that could have...

Response by Lt Col Charlie Brown made Mar 11 at 2024 2:56 PM

Lt Col Charlie Brown — Mon, 11 Mar 2024 14:56:23 -0400

MSG Private RallyPoint Member COL Randall C. or any personnel specialist...suggestions?

Response by LTC Private RallyPoint Member made Mar 11 at 2024 3:03 PM

LTC Private RallyPoint Member — Mon, 11 Mar 2024 15:03:36 -0400

Asking for advice....

Response by COL Randall C. made Mar 11 at 2024 3:52 PM

COL Randall C. — Mon, 11 Mar 2024 15:52:50 -0400

CPT Private RallyPoint Member, I gave a pretty detailed run-down in the other post from back in December.

A straightforward option for you is to separate with an outstanding debt.

When the Army does a final reconciliation on your account, any outstanding payments and debts will be totaled and any debt will be taken out of your final pay. If there remains a debt, it will be transferred to the department that handles out-of-service debt* and you'll be notified of the balance you owe. You'll have 30 days from the date of the first collection notice to pay off the debt in full before interest starts accruing (if you don't pay it in full or establish an installment plan, then it is considered delinquent).

Just keep checking in with DFAS to see when the debt is transferred and then pay it in full. At that point the issue will be resolved and you can put it in the rear-view mirror.
-----------------------------------
* Out-of-Service Debt and Claims - https://www.dfas.mil/debtandclaims/

Debt and Claims

The official website of the Defense Finance Accounting Service (DFAS)

Response by SGM Bill Frazer made Mar 11 at 2024 11:12 PM

SGM Bill Frazer — Mon, 11 Mar 2024 23:12:52 -0400

I would think a smart officer, would have squirrelled away the over payment, drawn interest and be ready to repay the debt.

Response by CPT Private RallyPoint Member made Mar 11 at 2024 11:41 PM

CPT Private RallyPoint Member — Mon, 11 Mar 2024 23:41:26 -0400

You would get a debt and then you would just get the bill. I was overpaid with leave. I got out of the Army for a couple years and out of the blue I was hit with a 3k bill in the mail from when the Army forgot to take my leave and give me extra terminal leave. I end up get calling up DFAS and set up a payment and I was good. It was pretty simple.

Response by 1SG Private RallyPoint Member made Mar 17 at 2024 11:59 AM

1SG Private RallyPoint Member — Sun, 17 Mar 2024 11:59:13 -0400

So if I follow this correctly, the Army overpaid you some kind of way while activated, discovered you were paid in error, and established a debt repayment. Problem is, they did this after you were no longer on orders and now you're trying to repay based on drill pay. And the big heartburn is that you are concerned that the debt will outlast your obligated term of service.
Assuming that the debt is not in error, basically you got an interest free loan.
So here are your options as I understand them.
1. Keep on serving and it will come out in the wash eventually.
2. Separate at the time you choose and DFAS will send you a notice to your HOR outlining options for repayment. Then do what makes sense for your situation.
3. Ignore all that and Uncle Sam will get you with your tax return - plus interest.
4. Fight the whole thing as an error not the fault of the Soldier. The success rate is not great on this, and not knowing what the issue was that originated this gong show it is difficult to prognosticate. We do this sort of thing all the time with VA debts,