Defense Finance
and Accounting Service

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

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If you disagree with a debt

If you disagree with a debt, you can contact us to discuss your options or you can file a formal protest. There are many reasons why a debt occurs and/or is protested, including:
  • Service member’s Group Life Insurance (SGLI) recovery – premium was paid by service on behalf of member
  • Incorrect final pay or payments received after the individual separated from service
  • Non-performance or performance past date of separation (DOS) from the service
  • Debts generated from excess leave
  • Recoupment* of bonus for enlistment or re-enlistment
*Recoupment - Military term meaning to take back, recover, or reimburse funds; to deduct or withhold (part of something due) for an equitable reason.

Resolve your debt

Many issues can be resolved without having to file a formal debt protest. You may contact our Customer Care Center at 866-912-6488 for the following:
  • W2 re-issuance
  • Tax Certificate re-issuance
  • Payment options
  • Issues regarding removal of debt from credit report
  • Filing for financial hardship
If you are paying DFAS and the debt is being collected out of our active duty pay at the same time, contact both your pay office and DFAS so we can determine how to proceed.

If your debt letter indicates you are in debt for an allotment issued after you left the military but you never received the allotment, contact the allotment recipient. Most likely they received the funds and should issue you a refund.

Please Note: The wages paid in error in the prior year remain taxable to the employee for that year. This is because the employee received and had use of those funds during that year. The employee is not entitled to file an amended return (Form 1040x) to recover the income tax on these wages. Instead the employee is entitled to a deduction (or credit in some cases) for the repaid wages on his or her income tax return for the year of repayment. DFAS will mail tax certificates for amounts repaid on out-of-service debts each January.

Protesting your debt

Collection continues during the protest process. To prevent your account from being referred for involuntary offset or to a private collection agency, you must make monthly payment arrangements with our office. If you submit a protest and the debt is cancelled, you will receive a refund for all collected funds.

The entire debt protest process may take up to 60 days. You will need to submit a letter that includes your name, social security or account number, and a detailed description of why you are protesting the debt, as well as documentation to support your protest (see examples under Active Component below). All documents must have your SSN/account number listed on each page and the packet must be submitted in its entirety. Please ensure that all required documentation is submitted or your protest will be returned.

ACTIVE COMPONENT (AC)

BNS (Enlistment/Re-enlistment Bonus):
  • Enlistment/Re-enlistment contract with bonus documentation
  • DD Form 214 stating separation code of non-recoupment
  • Letter from unit collection bonus or Army G1 stating that bonus is non-recoupable
EXL (Excess Leave Debt):
  • Official certified leave document that differs from the 0-642 leave computation
GPL (Loss or Damage of Government Property):
  • Contact your former Unit
LVE (Overpayment of Accrued Leave):
  • Official certified leave document that differs from the 0-642 leave computation
NRP/NPT (Overpayment):
  • Bank statement showing non-receipt. Statement must be from account used during service time. Account number must be legible, and include current and prior month statement at time of discrepancy

RESERVE COMPONENT (RC), U.S. ARMY RESERVE (USAR), OR NATIONAL GUARD (NG)

RSA (Recoupment* for performance past DOS):
  • DD Form 214/Separation orders
  • Amended Orders
  • Documentation from unit allowing performance past DOS
RSE (Excess Leave Debt):
  • Official certified leave document with differing dates
RSH (Enlistment/Re-enlistment Bonus):
  • Enlistment/Re-enlistment contract with bonus documentation
  • DD Form 214 stating separation code of non-performance
  • Official orders if placed on active duty
  • Letter from unit collecting bonus or Army G1 stating bonus is non-recoupable
RSK (Service member’s Group Life Insurance):
  • SGLI Form 8286 declining coverage
  • Letter from unit requesting cancellation of debt, on unit letterhead, signed and dated
RSN (Loss or Damage to Government Property):
  • Contact your former unit
RSR (Recoupment* of Pay after Your Release From Active Duty (REFRAD)):
  • DD Form 214 indicating a different REFRAD date
Submit protests:
Mail or fax documentation to:
DFAS-Indianapolis
Dept. 3300 (Protest Audit)
8899 E. 56th Street
Indianapolis, IN 46249-3300
Fax: 317-275-0281
 
If you do not have sufficient documentation to refute your debt and feel it is in error, please refer to Waivers and Remissions or Corrections of Records.


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Page updated June 28, 2011