Has anyone here included military overpayments in their bankruptcy?

[hopeforus]

We have about 11k we owe to the military. They haven't even tried to collect. But it shows on his LES that we owe it. He hasn't been attending drills in about a year so they haven't taken his pay away from the amount owed either. We are filing soon... have our appt in the morning. How do we include this? We don't get bills from them or anything? Just shows on the bottom of his LES but they have never ever even tried to collect.

We need this taken care of in bk if possible so that they don't just not pay him once he starts going to drills and school again. (long story you don't really want to know about lol)

Thanks.
C

[flyinbroke]

Oh, they will collect. I owed 1800 from an overpay in 9/08 (screwed up my retirement date, used money to escape Ike), it appeared on my retirement statements and they finally sent a bill to me 2/09. If I still owe, I will be including it in a BK (I have to do a 13) but it seems to be shrinking fast...they only give you 36 months to pay it off.

Being as it is government, not sure if they will be a priority payment.

[hopeforus]

I wonder how to list it on our sheets though... I guess just DFAS and the amount? Our lawyer hasn't done anything with military stuff like this. Since it hasn't gone to collections I just have no clue.

ok so if they do start collecting when he gets drill pay... if we are 1yr into that 36mos (or whatever)... will they just split the 11k over 2yrs or just not give us any pay at all until it's gone?

Just something else to think about. Of course.

[flyinbroke]

Not sure how it works for reservists since I retired. I got an invoice. I could pay in full, or pay 50 a month for 36 months max. APR is 3 percent. They will give you a choice to pay it yourself. They will turn over to collections (prob a govt entity) who likely can authorize it being taken from your pay.

On active duty I knew people who got 37 cent paychecks. I am betting they did not talk to anyone about payment plans, etc.

On my interview forms for BK I used DFAS (who got the checks) and the amount owed.

[hopeforus]

Well that's just what we'll do then and see what happens.

[angiephnx]

I was active Army and got out early (apr 08) with a family care plan (ch 5) honorable discharge. In Oct 08 I received a letter from DFAS stating that I owed them $20,000+ dollars for a reenlistment bonus I received. I have been disputing with them for the past year and a half about the actual unearned portion but it's like talking to a wall. Meanwhile, they have been charging me interest at 5% plus "administrative" charges. The dept of treasury and a law firm are also involved with collections and the debt now is about $28,000. I also received that bonus when I was in Iraq which meant it was tax free but on my W2 for 2008 DFAS included my "unearned bonus" to my regular pay showing the IRS that I earned an extra $20,000. (My W2 shows that I earned $27,500 as a sgt from 1 Jan to 8 Apr) I tried to dispute that as well because I actually received that money in 2006 and it is like I'm lying to the IRS (not to my advantage) but again it is like talking to a wall.
Even though this debt is with the "government" it doesn't fit under any of the descriptions of a "priority" debt. I have talked to a couple of lawyers to get some advice but since I don't live in a "military" town no one really knows.

[hopeforus]

I forgot to update this. We actually found a place right on the DFAS site about bankruptcy and they say that if it's discharged and they still take it out of your pay then they will cut you a check.