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Defense Finance
and Accounting Service

Providing payment services of the U.S. Department of Defense

1-888-332-7411

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If you've filed for bankruptcy

Debt collection is stopped once we learn you filed a bankruptcy petition. (Unless it is determined that the automatic stay imposed at the time of filing was lifted or is no longer in effect.) In most cases we receive an individual’s bankruptcy information through the bankruptcy court; however, on occasion we do not receive the proper documentation. If you’ve made involuntary payments, or your taxes or wages were taken by DFAS after you filed bankruptcy, you will be refunded.

If you filed for Chapter 7 (no assets), Chapter 7 (with assets), or Chapter 13 bankruptcy and your IRS refund, military pay, retired pay, federal salary or Social Security benefits are offset, please fax your bankruptcy documentation to 317-275-0281. You may also email or mail us your documentation at:

OOSDEBT@dfas.mil

DFAS-IN/Debt and Claims
Dept. 3300 ATTN: Customer Care Center
8899 East 56th Street
Indianapolis, IN 46249-3300

Refunds after bankruptcy

We will review the account to determine if any payments were posted to the account after the automatic stay. If a payment was posted, our office will issue a refund. If you filed any type of bankruptcy, a hardcopy check will be mailed to the address listed on the bankruptcy document, or the most current address we have documented in our database.

In some cases we attempt to settle your debt by taking funds from other places through a process we call offset. If we have withheld funds via administrative offset or salary offset, and you included the debt in the bankruptcy filing, notify us immediately. Our office will contact your current finance office or servicing payroll office to request suspension of collection action and request they refund any funds collected after the automatic stay date.

Our office recognizes the sensitive nature of bankruptcy laws. Each bankruptcy document received is processed in an expeditious manner.

How we determine when to offset funds

Often, customers believe that the date the funds post to the account is the date used to determine if funds should be returned. However, the date the funds were withheld by the Department of Treasury via the Treasury Offset Program is the date used to determine if you are entitled to receive a refund. For example:

No Refund is due:
Date your federal refund was offset: March 23, 2010
Bankruptcy filing date: March 24, 2010
Funds post to your account: April 10, 2010

Refund due:

Date your federal refund was offset: March 23, 2010
Bankruptcy filing date: March 22, 2010
Funds post to your account: April 10, 2010
 
If we determine you are due a refund, it takes approximately 3 weeks from the date of the Department of Treasury's letter for the funds to post to our database. Once the funds have posted to your account we will submit a priority refund.

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Page updated May 3, 2011