Posted on Dec 19, 2023
If I were to leave the Army without having completely repaid the debt for a miscalculated REFRAD, what consequences would I face?
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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 caused such a large debt to show up; apparently, this happened to a lot of guys in my unit, but I had the dubious honor of having the largest by a wide margin. My unit's ARA began looking into the matter with my command and it seems that my REFRAD date was miscalculated, resulting in a debt. If what I've heard about situations like this is true and my debt really is as big as it seems, I could be looking at a very drawn- out debt repayment with no option to pay in a lump sum (apparently an Army policy so we can't claim the Army left us unable to pay our bills). The timing of this couldn't have been worse, as my service obligation is supposed to end very soon. I'm really not on board with having to stay in longer just because someone else made a mistake, but I also don't want to find myself getting a black mark on my record.
With the context out of the way, here's my actual question: If I were to leave the Army without having completely repaid the debt, what consequences (i.e. extra fees, penalties, etc.) would I face?
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 caused such a large debt to show up; apparently, this happened to a lot of guys in my unit, but I had the dubious honor of having the largest by a wide margin. My unit's ARA began looking into the matter with my command and it seems that my REFRAD date was miscalculated, resulting in a debt. If what I've heard about situations like this is true and my debt really is as big as it seems, I could be looking at a very drawn- out debt repayment with no option to pay in a lump sum (apparently an Army policy so we can't claim the Army left us unable to pay our bills). The timing of this couldn't have been worse, as my service obligation is supposed to end very soon. I'm really not on board with having to stay in longer just because someone else made a mistake, but I also don't want to find myself getting a black mark on my record.
With the context out of the way, here's my actual question: If I were to leave the Army without having completely repaid the debt, what consequences (i.e. extra fees, penalties, etc.) would I face?
Finance
LES
Military Pay
Edited 12 mo ago
Posted 12 mo ago
Responses: 6
To your last question, if you seperate from the service before paying back a debt there will be much more than "a black mark on your record". DFAS has a department (the Out of Service Debt department) that handles cases when service members separate and there is an outstanding debt. The federal government will claw back the debt in one form or another (well, if you decide to live the rest of your life off the grid, maybe not), either through an offset of federal payments, collection agencies, property liens, etc.
The next four paragraphs are there to tell you why trying to ignore the problem (i.e., seperate without addressing it) will not make it go away and is an incredibly bad idea. If you have that impression now, you can just skip them and go to the one marked with a #.
What you could expect is that you'll get a debt notification letter and reminder from DFAS within the first two months. After they failed to collect the debt, in addition to administrative & interest charges that will start accruing at the current treasury rate (4.875% through the end of December 2023) there are a number of other actions DFAS does.
After the two months (technically, "62 days after the first collection notice is sent") they report it as a collection account to the major credit bureaus (Equifax, Experian, Trans Union, and Innovis), have the collection agencies that are contracted with the federal government start trying to collect the debt, and pass it off to the Department of Treasury (they have a special program call the Treasury Offset Program (TOP) for debts owed to the government).
TOP will garnish any payment you get from the federal government to cover your outstanding debt. If the debt isn't discharged (repayment, elimination by the government, legal action, etc.), then failing some catastrophic event that wipes out any trace of it, it will exist as long as you do and (unless specifically exempted from offset) every tax refund, stimulus check, social security payment, state payment (they all have reciprocal agreements with the federal government), etc. will be offset to repay the debt.
Ok, does that have your attention now? Unless you're someone that doesn't care about your credit rating and plans on living between the cracks of society, then you should absolutely address the issue head-on.
# While there are many things I would leave in the hands of others if I have "a warm fuzzy" that they are doing their best to address the situation, pay issues are generally one of the exceptions I have.
How long has your unit been working on addressing this debt issue? If they've been working on it "for a few months", have you been actively involved during that time frame? If this is something that happened to "a lot of guys" in your unit, then it should be the top priority of your unit administrator in getting it addressed.
Even if you feel that they are giving it as much attention as it deserves, I would contact DFAS customer service* to ask what activity they see on your account, to hear their read on the debt to your account, and get a better understanding of what's going on. You can inform them of what's happened on your end (the unit should be ... I was told this ... I'm going to be separating on ... ), your status and how to make sure it is addressed if you transition.
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* Contact DFAS - Call customer service at [login to see] or you submit a ticket though AskDFAS (the following is a direct link to submitting a ticket for your military pay & allowances (MPA) - https://corpweb1.dfas.mil/askDFAS/ticketInput.action?subCategoryID=91&pgModId=4¤tUser.currentRequestNonce=bc43a563-eb11-43f0-bda9-7afeb2a5e9ba
The next four paragraphs are there to tell you why trying to ignore the problem (i.e., seperate without addressing it) will not make it go away and is an incredibly bad idea. If you have that impression now, you can just skip them and go to the one marked with a #.
What you could expect is that you'll get a debt notification letter and reminder from DFAS within the first two months. After they failed to collect the debt, in addition to administrative & interest charges that will start accruing at the current treasury rate (4.875% through the end of December 2023) there are a number of other actions DFAS does.
After the two months (technically, "62 days after the first collection notice is sent") they report it as a collection account to the major credit bureaus (Equifax, Experian, Trans Union, and Innovis), have the collection agencies that are contracted with the federal government start trying to collect the debt, and pass it off to the Department of Treasury (they have a special program call the Treasury Offset Program (TOP) for debts owed to the government).
TOP will garnish any payment you get from the federal government to cover your outstanding debt. If the debt isn't discharged (repayment, elimination by the government, legal action, etc.), then failing some catastrophic event that wipes out any trace of it, it will exist as long as you do and (unless specifically exempted from offset) every tax refund, stimulus check, social security payment, state payment (they all have reciprocal agreements with the federal government), etc. will be offset to repay the debt.
Ok, does that have your attention now? Unless you're someone that doesn't care about your credit rating and plans on living between the cracks of society, then you should absolutely address the issue head-on.
# While there are many things I would leave in the hands of others if I have "a warm fuzzy" that they are doing their best to address the situation, pay issues are generally one of the exceptions I have.
How long has your unit been working on addressing this debt issue? If they've been working on it "for a few months", have you been actively involved during that time frame? If this is something that happened to "a lot of guys" in your unit, then it should be the top priority of your unit administrator in getting it addressed.
Even if you feel that they are giving it as much attention as it deserves, I would contact DFAS customer service* to ask what activity they see on your account, to hear their read on the debt to your account, and get a better understanding of what's going on. You can inform them of what's happened on your end (the unit should be ... I was told this ... I'm going to be separating on ... ), your status and how to make sure it is addressed if you transition.
----------------------------------------------------------------
* Contact DFAS - Call customer service at [login to see] or you submit a ticket though AskDFAS (the following is a direct link to submitting a ticket for your military pay & allowances (MPA) - https://corpweb1.dfas.mil/askDFAS/ticketInput.action?subCategoryID=91&pgModId=4¤tUser.currentRequestNonce=bc43a563-eb11-43f0-bda9-7afeb2a5e9ba
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That's definitely a lot to digest, but I'm somehow not surprised. Our admin and finance was painful from start to finish on this mob and many of us started having finance issues as soon as the mob process started.
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COL Randall C.
CPT (Join to see) - I would do the actions I mentioned in the last paragraph. If you unit comes though (or your RPAC), then all is good. If not, then you need to at least have your foot in the door because you'll be handling it with DFAS on your own once you seperate, just don't 'ignore' it ... you can work through an out of service debt, but you need to be engaged. Contact DFAS and get a formal response from them.
If you run into issues and aren't getting actions, then contact the Army Ombudsman (request it through DFAS) ... it's amazing what they'll be able to do.
If you run into issues and aren't getting actions, then contact the Army Ombudsman (request it through DFAS) ... it's amazing what they'll be able to do.
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COL Randall C. - Absolutely; I'm definitely aware there's no ignoring it, but I was (naively) hoping there was a simpler solution... I just spoke with my UA a couple days ago and it's starting to look like this is going to be painful no matter what decision I make.
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COL Randall C.
CPT (Join to see) - I know it can be painful, but keep at it. I just DMed you the contact information for a Senior Army Ombudsman at DFAS. They usually get involved when the "normal process fails", but you can reach out and see if this is something that would be elevated up to them (it's taken a while .. affects multiple people .. etc).
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The shortest answer is that if you ETS before the debt is paid, that debt will still be collected from any civilian pay you receive. It could be in the form of some garnishment from civilian pay, garnishment from your income tax returns. One way or another, the Government will get that debt.
That said, if your debt is because your REFRAD date got screwed up, I would HIGHLY recommend you work with your RA, your unit Command (and higher) to get this fixed.
When did you get to DEMOB site? When did you Final Out? Depart DEMOB? Start Post Deployment Leave (f you took any)?
That said, if your debt is because your REFRAD date got screwed up, I would HIGHLY recommend you work with your RA, your unit Command (and higher) to get this fixed.
When did you get to DEMOB site? When did you Final Out? Depart DEMOB? Start Post Deployment Leave (f you took any)?
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I'm still trying to get a copy of the email regarding my command's investigation on the matter, but the short redeployment timeline was like this:
I was cleared to get an early RFT because I would have missed a major opportunity to get an "Ausbildung" (I live in Germany and work on the German economy) and was officially released to redeploy in late July along with someone else from my unit and arrived at the demob site within a couple of days.
What followed was an absolute mess of a demob... Our higher command claimed they could demob us in 5 days (which was a lie because they botched another redeployer's early demob so badly he had to do everything himself and he ended up finishing in 2 weeks), but it became apparent within a day that wouldn't happen. Over a period of three weeks, we were bounced from office to office with no clear roadmap for the path to a REFRAD. Instead of helping us, we spent most of our time running around doing all the legwork ourselves while two commands bickered over who was responsible for what. To give you an idea of how bad it was, the head of our installation's TAP office accused us of "wasting the office's time" and "taking away time from Soldiers who need to outprocess more urgently [than you guys]" just because we came by the office to ask for help. In addition to that, half the people we visited claimed they had "no idea" we were coming (also BS because I saw my CG's email directing my BC and HHD commander, along with her own staff to put things in motion for our early demob months in advance) and spent most of their time pointing fingers at another command or trying to figure something last- minute out. To top it all off, the individual from our higher command who was responsible for walking us through the demob went on leave shortly after we started and left some poor LT (who had apparenly been poorly briefed) as the replacement POC.
I was officially released in mid- August and started terminal leave that same day. My terminal leave covered me until about the second week of September.
When I was going over the debt situation with my ARA, one thing that stuck out was that the amount of the debt was grossly disproportionate with the time between my REFRAD date and the debt showing up. Roughly speaking, the debt was equivalent to 3 months' worth of pay and entitlements. Essentially, that would mean the debt began accruing before I even left theater.
I was cleared to get an early RFT because I would have missed a major opportunity to get an "Ausbildung" (I live in Germany and work on the German economy) and was officially released to redeploy in late July along with someone else from my unit and arrived at the demob site within a couple of days.
What followed was an absolute mess of a demob... Our higher command claimed they could demob us in 5 days (which was a lie because they botched another redeployer's early demob so badly he had to do everything himself and he ended up finishing in 2 weeks), but it became apparent within a day that wouldn't happen. Over a period of three weeks, we were bounced from office to office with no clear roadmap for the path to a REFRAD. Instead of helping us, we spent most of our time running around doing all the legwork ourselves while two commands bickered over who was responsible for what. To give you an idea of how bad it was, the head of our installation's TAP office accused us of "wasting the office's time" and "taking away time from Soldiers who need to outprocess more urgently [than you guys]" just because we came by the office to ask for help. In addition to that, half the people we visited claimed they had "no idea" we were coming (also BS because I saw my CG's email directing my BC and HHD commander, along with her own staff to put things in motion for our early demob months in advance) and spent most of their time pointing fingers at another command or trying to figure something last- minute out. To top it all off, the individual from our higher command who was responsible for walking us through the demob went on leave shortly after we started and left some poor LT (who had apparenly been poorly briefed) as the replacement POC.
I was officially released in mid- August and started terminal leave that same day. My terminal leave covered me until about the second week of September.
When I was going over the debt situation with my ARA, one thing that stuck out was that the amount of the debt was grossly disproportionate with the time between my REFRAD date and the debt showing up. Roughly speaking, the debt was equivalent to 3 months' worth of pay and entitlements. Essentially, that would mean the debt began accruing before I even left theater.
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im willing to bet that the great COL Randall C. may have some good feedback on this one. best of luck to you!
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