If you receive a notice from the Department of Veterans Affairs (VA) telling you that you owe the agency money because it overpaid you veterans benefits, or because payment on an education advance is due, it is important to respond. If you don't deal with the situation, your wages could be garnished.
Waivers and Settlement
If paying back the debt would cause you a great hardship, you can ask for a waiver. If you are denied a waiver, you can appeal the denial. Learn more about VA overpayments and the waiver process.
If your efforts at obtaining a waiver fail, you can make an offer to pay back the VA an amount less than you owe, or set up a payment plan that will not cause you too much hardship. It is important to either make payments or to contact the VA Debt Management Center to discuss your inability to pay.
If do not make any payment at all and do not respond to letters from the VA about your debt, after 180 days have passed, the VA or the Department of the Treasury will seek to collect the debt. If you are working, the VA or the IRS can garnish your wages for payment of your debt to the VA.
Wage garnishment means the VA or the IRS contacts your employer, tells them you owe the VA a debt, and orders them to forward part of your earnings directly to the government for payment of your debt. Whether your employer wants to do this or not, they have to or the government will sue them.
What Are My Rights?
Before the VA can garnish your wages, the agency has to give you written notice of its intent to do so. The VA is required to send you this notice 30 days in advance of taking action to garnish your wages. This notice must include:
- what the debt is for
- amount of the debt
- the intent to make deductions from your pay until the debt is paid in full
- an explanation of your right to:
- review and make copies of all VA paperwork relating to the debt
- enter into a written repayment plan to avoid wage garnishment, or
- have a hearing to dispute the debt or to work out a payment plan. (This is for proposed plans only, not payment plans previously established between yourself and the Debt Management Center.)
Your Request for a Wage Garnishment Hearing
It isn’t up to the hearing officer to decide whether to schedule a wage garnishment hearing or not.
You have 15 days from the time you receive the letter saying the VA or IRS is going to garnish your wages to submit a request for a hearing. If you ask for a hearing within this time frame, your wages cannot be garnished until you have had your hearing and the hearing officer has issued a decision saying the wage garnishment can proceed.
If you submit a hearing request more than 15 days after getting the garnishment notice, you can still have a hearing, but your wages will begin to get garnished without waiting for the hearing. Only if you can show that the delay in asking for the hearing was due to circumstances “beyond your control” will the wage garnishment be delayed.
When you ask for the hearing (appeal the garnishment action), you have the right to request either an in-person hearing or a telephone hearing. You will then receive a letter telling you when the hearing will be and the deadline for submitting new evidence for your hearing.
Wage Garnishment Hearings
Wage garnishment hearings are held by VA hearing officials, who may also hold hearings for government agencies besides the VA.
If the VA hearing official believes the debt dispute can be resolved by a review of the documentation only, the VA will have a “paper hearing.” This is not a hearing at all, it just means that the hearing officer reviews your file and issues a decision based on the written record alone.
If the case cannot easily be resolved, the hearing officer will schedule a hearing. You don’t get any say in the date or time of the hearing, and it is very important to show up. Otherwise, unless you can show “good cause” (a reasonable explanation for your absence), you will lose your right to have a hearing.
The hearing will be face-to-face or over the telephone. It’s an informal hearing, but if you or any other witnesses testify, an oath is required. A transcript of the hearing is not created, but the hearing officer must write a summary of the hearing. Your travel expenses for getting to the hearing will not be reimbursed, but if you have a phone hearing you will not have to pay the phone expenses.
Evidence to Help Your Case at the Hearing
The VA or the IRS will present evidence proving that the debt exists, along with the amount of the debt. After that, you get to present evidence to prove you don’t owe any money or that the amount of debt alleged is incorrect. You have to prove this by a “preponderance of evidence,” which means you have to show that “more likely than not” that the VA or IRS is incorrect about the amount of debt or is wrong that any debt is owed by you.
You can also submit evidence showing that terms of the repayment deal are illegal or create financial hardship, or that it is illegal for the debt to be collected (if that is so).
Hearing Officer Decision
You have the right to receive a decision as soon as possible after the hearing, and no later than two months after the VA or IRS received your original request for a hearing. The decision will include:
- a discussion of the facts presented at the hearing
- a summary of the hearing officer's decision, and
- details of the repayment agreement, if any.
If a final decision is made to proceed with the garnishment, then a garnishment order will be sent to your employer within 30 days of the decision.
Requesting an Adjustment of the Amount Garnished
You will have the right to request a review of the dollar amount being garnished out of each check, but you cannot do so until actual garnishment has occurred.
To contest the amount garnished, you will need to show a significant change in your financial circumstances, such as disability, divorce, or terminal illness. You must be able to show that due to your changed circumstances, you are unable to provide shelter, food, or other basic needs for yourself and your family while the wage garnishment is in place.
For more information about your rights, see Nolo’s article on wage garnishment.
Getting an Attorney
You may wish to hire an attorney to represent you at the wage garnishment hearing. You can use Nolo’s lawyer database to locate a consumer protection attorney to help you.