How to Dispute a VA Debt You Don’t Owe

You can drink a pot of coffee, slam a bunch of white Monsters, or even jog a mile (maybe a half-mile for some of us GWOT vets). But none of those will spike your heart rate faster than getting a letter from the Department of Veterans Affairs informing you that you owe it money. 

Listen. 

No one likes getting a bill, especially if it’s a surprise. And double that if it’s from the federal government. Former military people know that few things in life bring more financial pain than a sudden, surprise debt to the government. The military was bad about it, the VA can be worse. 

With that in mind, you might be tempted to just pay the debt as quickly as possible, and go into full-on panic mode before you do. But should you?

I know, some of you are reading this and wondering if I’m out of my mind. Just hear me out. The one thing that you can do wrong in this situation is nothing. Do not chuck that letter, do not put it out of sight. The only good thing about your freakout is that you’ll actually read the letter. 

Before your panic attack forces you to rearrange your finances to pay the VA off, stop. Take a breath. Re-read the debt notification as if it were someone else’s. Do you actually have a copay? Did you actually get a GI Bill overpayment? Is that debt valid? Can you prove it?

This might shock some readers, but the federal government can and does make mistakes. You might not even have a real debt. Overpayment scams are a thing (and a big thing), so the first move is to verify the debt in your official VA.gov account.

If the debt is real and also wrong, remember that you don’t negotiate with terrorists. You challenge it, and you challenge it fast, and through the proper channels. You have the right to dispute all or part of an overpayment or copay charge, and if you dispute an overpayment within 30 days of that first debt letter, the VA will stop collection action while it decides the dispute. For copays, disputing within 30 days helps you avoid late charges. 

Don’t get unstuck in time on this one. The timing is too important.

What Are You Fighting

Before you tie on your boxing gloves, there are actually three different possible avenues for redress, and they’re very different. 

When you dispute a debt it means the debt itself is wrong. Flat wrong. The VA messed up. Maybe the amount is wrong. Or maybe the overpayment never should’ve been created in the first place because the VA used bad information, missed a dependency update, misread school enrollment, or botched a benefits adjustment. The copay might apply to someone else, because some wires got crossed along the way. 

Unlikely doesn’t mean “impossible” and it’s important for you to check it out.

A waiver is a debt relief request. Requesting a waiver means you’re acknowledging the debt is accurate, but you’re asking the VA to forgive it because repayment would be unfair or unaffordable.

Then there’s an appeal, which challenges the VA decision that created the debt in the first place. If the debt came from a bad benefits decision, you may need both a dispute and a decision review. 

It’s important to realize what you’re about to fight because they all take time to process in the VA bureaucracy, a lot of veterans accidentally file the wrong thing, and these avenues are all attached to a ticking clock. If you don’t owe the debt, dispute it. 

The 30-Day Window

As mentioned, you need to get the dispute in writing within 30 days of the first debt letter. Where the military would just take the chunk out of your paycheck and be done with it, the VA start collections immediately. These actions can affect your credit score as well as your bank account.

For benefit overpayments, a dispute filed within 30 days stops collection actions while the agency decides whether or not the debt is accurate. For copays, a dispute within 30 days puts off any late payment charges. All you gotta do is file a letter to get 30 days of breathing room. This is where you gather the receipts you 100% kept, right?

Listen.

If the debt is actually wrong, pull the paper trail: the debt letter, the decision letter that caused the debt, any recent award letters, payment history, school records, dependency documents, direct deposit records, and any message or notice showing the VA had the correct facts. Like a lawyer prosecuting the VA, you’re building a timeline to place the VA at the scene of the crime. 

The point is to show exactly what the VA got wrong and when. If the debt came after a divorce, remarriage, dependent change, withdrawal from school, or income change, or any other kind of life event that affects your benefits and triggers overpayments, start there. Obviously, the debt is a copay, that’s where you’ll begin that process.

What to Say in a Dispute With a Faceless Monster

The VA basically needs to know what happened (to include dates) and where they went wrong (and by how much). You don’t need to be Kurt Vonnegut to write it, either. They just want the facts: When you got the debt letter, the debt it referenced, and why the charge is wrong. You also need to include your supporting documentation. That’s it.

But there is one important caveat. When calling both the VA copay billing line and the VA overpayment billing line for this explainer, the VA operators said that veterans disputing charges don’t need to write flowery language, direct is good but it would be appreciated if the language was professional. 

“I get it,” said one billing expert. “I’m not a veteran, but I talk to a lot of veterans. I’m a person in America and I understand why they’re upset. I would be too. Four-letter words don’t push the process any faster. We really want to help, so just the information and the supporting paperwork is all we need.”

So ditch the manure mouth along with the flowers.

For benefit overpayments, the fastest way to submit your dispute is the VA’s online debt dispute form. You can also use Ask VA or mail the written dispute to:

Debt Management Center
PO Box 11930
St. Paul, MN 55111. 

If you have collection questions about an overpayment debt, the Debt Management Center number is 800.827.0648 (overseas callers use 1-612-713-6415). The center is open Monday through Friday from 7:30 a.m. to 7 p.m. Eastern.

If the debt is a health care copay bill you can dispute copay charges through Ask VA, by mail, or in person. To do it in person, submit the written dispute to the health administration office at your VA medical center. 

Decision Appeals 

Just like in the military, if you don’t like the outcome of a dispute, you can appeal up the chain. Only in the VA system, you aren’t going from the First Shirt (or “Top” for you Army types) to the commander; the chain is more like an appeals court system. 

Sometimes winning a debt fight requires fighting the underlying benefits decision. If you disagree with the decision that resulted in the overpayment, you can request a decision review. Your options are a Supplemental Claim, a Higher-Level Review, or a Board Appeal.

A Higher-Level Review is for when you believe VA got it wrong based on the records it already had. The Higher-Level Review must be requested within one year of the decision letter, and you can’t submit new evidence with it. You can request an optional informal conference to point out factual or legal errors. 

If you want to submit new evidence, then you’d want to file a Supplemental Claim to submit your new and relevant evidence. If you want a Veterans Law Judge to review the case, a Board Appeal within one year of the decision letter.

This is the one-two punch of the VA debt fight. You disputing the debt itself so the VA doesn’t start collections while you’re contesting the bill. Then, follow it up with a cross that requests the appropriate decision review (if the debt was caused by a bad benefits decision). Call it the “Thrilla in Manila (Envelope).”

Waivers: VA Debt Relief

Listen. 

A waiver is not your first move if you truly don’t owe this debt. VA debt is not like seeing you were overpaid on your LES and then the military keeps your paychecks for as long as it takes to repay while you work the night shift at Arby’s so you can survive until your pay comes back. 

American society frowns heavily on the Department of Veterans Affairs when veterans are destitute, homeless, or otherwise burdened. So the VA offers many ways to pay. Or not pay, in the case of a waiver.

The VA grants waivers where the debt is real, but repayment would be unfair or would cause hardship. A waiver request must be made within one year of the first debt letter, and waiver requests for overpayment debt relief include VA Form 5655, the Financial Status Report. This status update would show the hardship repayment would cause.

One of the benefits of using direct, professional language in your explanations is that you aren’t sending mixed signals. This debt is real or it’s not, and if it is and it might break you to pay it, you need to speak up. 

Call For Backup

Yeah, backup. Reinforcements. You do not have to go through this ordeal alone. An accredited attorney, claims agent, or Veterans Service Organization representative can help with your decision review. This is especially helpful when the debt ties back to a compensation, pension, or education decision needs to be challenged on the benefits side. 

Think of it as a defense attorney. You don’t know all the laws in this area, so choosing to defend yourself is a terrible idea. Get someone who does know to be your advocate, especially if you think you’re right. This person will help you prove it. 

The bottom line is that the government gets enough of your money. If you don’t owe a debt, don’t pay it. And if you verify the debt somehow really exists, don’t take it lying down: dispute it. Then appeal the decision that made you indebted in the first place. Your money is better spent elsewhere.