There are many reasons why a military member’s pay might be subject to garnishment. An attempt to collect an unpaid commercial debt is one, an attempt to collect alimony or child support is another.
There is some confusion over the issue of military pay garnishment and if you don’t know your rights and responsibilities this is an aspect of military personal finance that can become a huge worry in certain cases. But knowing is half the battle.
What Is Military Pay Garnishment?
Military pay is subject to a variety of deductions including federal tax, and state withholding where applicable (not all states tax military pay). There are deductions for retirement plans, and allotments.
What’s an allotment? There are several different types but one of the most widely used is the allotment to repay Advance Pay. Service members have the option to choose advance pay in association with a permanent change of station move, resulting in an “allotment” that is deducted from the service member’s pay until the advance is repaid.
Military pay can be garnished if the service member is found to have unpaid alimony or child support. Don’t make the mistake of assuming that this type of garnishment is done without the knowledge of the Department of Defense.
In order for any such type of garnishment the Defense Finance and Accounting Service (DFAS) will get involved, and that could also mean attention from the service member’s chain of command.
If it sounds like that attention is likely to be punitive, that’s because it IS likely to be so. The Department of Defense takes a dim view of military members failing to meet their financial obligations in general.
The DoD definitely does not gloss over a failure to meet financial commitments where military spouses and dependents are concerned, even if the family is in the middle of divorce proceedings.
How Military Pay Garnishment Works
Generally speaking, you cannot simply garnish the wages of a military member even if you have a valid claim that the servicemember owes you or your company money. Procedures must be followed, and they may vary depending on circumstances, current federal law, the nature of the indebtedness, and other variables.
Alimony And Child Support
DFAS will enforce a garnishment order in cases involving spousal support (alimony) and/or child support, but ONLY if there is a court order. That order must contain specific language directing the employer to withhold funds from the military member.
Spouses who need to apply for a DFAS Child Support garnishment will need to contact the appropriate state agency (usually a state Child Support Enforcement office or similar) or seek the help of an experienced family law attorney.
Spouses who need to terminate child support or alimony, a court order is required here as well. The termination order must be issued by an entity with the authority to do so, or the termination date must have been specified in the original court order.
The military member having wages garnished for child support or spouse support can also have the payments terminated by showing proof that the obligation was fulfilled or is no longer applicable. That may be due to the child supported by the payments turning 18, with submitted documentation as proof.
Commercial Debt And Military Pay Garnishment
Technically speaking, for commercial debts you may not have your pay garnished in the same way that it would be in cases where alimony and child support are concerned. But your pay can still be affected.
According to the DFAS official site, commercial creditors including banks and credit card companies may be able to get help collecting via a request to DFAS for an involuntary allotment.
Military members with unpaid commercial debt are at risk just like any other consumer if that unpaid debt gets out of hand. Creditors who take a service member to court and win a civil judgment can petition DFAS to enforce that judgment in the form of an involuntary allotment.
A creditor doesn’t get this support automatically. DD Form 2635, an application for an involuntary allotment against the debtor, is required. In such cases, DFAS involvement does not include collecting or processing payments. The payments must go directly to the court or to the creditor(s).
DD Form 2635
DD Form 2635 isn’t just a request to get the federal government’s help in collecting a commercial debt; the requestor must certify certain things are true or applicable to the case in question.
For example, a creditor filling out DD Form 2635 must certify that, in cases where the judgment was made while the military member was serving on active duty, that he or she was either present at the time OR represented by “an attorney of the member’s choosing in the proceedings.”
In cases where the veteran or service member was not present or represented by an attorney at the judicial proceedings, “that the judgment complies with the Servicemembers Civil Relief Act.”
The creditor is also required to certify that the debt in question has not been discharged in bankruptcy, and that the military member has not filed for protection under U.S. bankruptcy law.
This form also requires the creditor to certify that in the event that the judgment is overpaid, the creditor will refund the amount of overpayment “within 30 days of discovery or notice of the overpayment, whichever is earlier.”
Those who do not refund any overpayments risk being denied the ability to request involuntary allotments in the future.
Consequences Of Having Military Pay Garnished Or Subject To Allotment
For those in uniform, it should be pointed out that, as described above, pay garnishment and involuntary allotments can lead to attention from your chain of command. That attention could result in a Letter of Counseling, A Letter of Reprimand, Captain’s Mast, or other Non-Judicial Punishment depending on circumstances.
This is a circumstance to be avoided at all costs by those in uniform as the Uniform Code Of Military Justice requires service members to meet all financial obligations and give financial support to spouses and dependents.
What Creditors Should Do Before Filing DD Form 2635
Prior to submitting paperwork, DFAS requests that creditors review CFR Part 112; 113 (1995), Indebtedness of Military Personnel and the Service Members’ Civil Relief Act.
Furthermore, DFAS rules state that 90 days notice is required before any involuntary allotment collection can occur. A servicemember can only have one involuntary allotment running at any given time.
What Military Members Can Do If They Are Having Their Pay Garnished Or Receive An Involuntary Allotment
Those in uniform should know that when the creditor sends a petition to DFAS to collect a debt, the military member is not trapped without recourse, even if the legal proceedings have ended in the creditor’s favor.
Those in uniform facing such garnishment or allotment actions have the following recourse that can be used as a defense where applicable. Note that in all cases, supporting documentation may be required to fully develop the claim or defense against the allotment/garnishment:
- The creditor failed to comply with the Servicemembers’ Civil Relief Act.
- Military duty or mission requirements caused the servicemember to be absent from the legal proceedings that led to the request for garnishment or involuntary allotment.
- Information used to justify the allotment/pay garnishment is false.
- Information used to justify the allotment/garnishment contains errors.
- The court judgment has been satisfied, set aside, or materially amended.
- The servicemember has some form of legal protection against an involuntary allotment.
DFAS states that it is required by federal law to comply with a court-ordered bankruptcy when an “automatic stay” is issued. In such cases, if the military member files bankruptcy the garnishment is removed.
Filing for bankruptcy is something not to be taken lightly; it may require the use of a bankruptcy lawyer and you may be required to liquidate certain assets depending on the type of bankruptcy you file.
Limits To Pay Garnishment and Involuntary Allotments
- Federal law governs how much military pay can be taken in cases of garnishment or allotment. For garnishment (which is related to spouse support and child support) the limit can be as high as 60% of disposable income depending on circumstances.
- The phrase “disposable income” means the garnishee’s gross pay, after taxes and other required deductions. In cases where military retirement pay is concerned the limit is 50% of the disposable income from retirement pay, and for commercial debt and support payments combined the maximum is 65%.
- For commercial debts, up to 25% of the members’ disposable income can be garnished. These percentages are subject to change due to legislation, DoD policy, state law, and other variables.
- DFAS is also limited in cases where a support garnishment (family support as opposed to the collection of a commercial debt) is earmarked for more than 25 percent of the service member’s disposable earnings. In such cases, DFAS will not honor a commercial garnishment; the official state advises creditors, “By federal law, child support has priority over commercial garnishments.”
- DFAS will reject an allotment in cases where the court requires an escrow payment. As mentioned elsewhere in this article, DFAS requires all payments to go directly to the court or the creditor.
- Retired military members’ pay is exempt from garnishment for commercial debts.
What Happens If DFAS Gets Multiple Garnishment or Allotment Requests For The Same Person
The DFAS official site states clearly that under existing guidelines only one allotment or garnishment is allowed at a time.
DFAS pays multiple garnishment requests on a first-come, first-served basis. The remaining requests will be placed in the DFAS system; the ones with no expiration date will, in the words of the DFAS FAQ page about allotments, “retain their priority.”
Requests that have expiration dates will lose priority once the expiration date has come and gone.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News
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