Defense Finance
and Accounting Service

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

1-888-332-7411

MyPay

Laws and Implementing Regulation

By enacting Public Law 103-94, the "Hatch Act Reform Amendments of 1993," (codified at 5 U.S.C. 5520a) Congress authorized the garnishment of federal civilian employees' pay to satisfy commercial debts. In that same law, Congress authorized "involuntary allotments" against the pay of active duty and reserve (on active duty for a period more than 180 days pursuant to Title 10) military members to satisfy commercial debts.

The portion of the law concerning involuntary allotments against the pay of military members became effective January 1, 1995. The implementing regulation is Indebtedness of Military Personnel, 32 C.F.R. Part 112; 113 (1995). It establishes the administrative procedures for evaluating applications and implementing involuntary allotments. Because applicants may be unfamiliar with the administrative procedures involved in applying for an involuntary allotment, we recommend that any creditor wishing to utilize this procedure review a copy of the regulation prior to filing an application.

Service Members' Civil Relief Act

The Service Members' Civil Relief Act (SCRA) is a federal law that applies at all times, not just when we are at war. It was designed to protect the legal rights of those who have been called upon to serve their country in the military.

There are many provisions in the SCRA. Most of them allow a service member to delay certain legal actions if his military service affects his ability to participate in the proceeding. There are also provisions that affect a member's financial transactions, such as allowing for lowered interest rates on loans while a member is serving on active duty.

The portion that is relevant to military commercial debt allotments is 50 U.S.C. App. Sec 520. This section basically says that in any proceeding where the defendant has failed to make any appearance, prior to any default judgment being issued, the plaintiff must file an affidavit with the court. The affidavit must state whether or not the defendant is in the military service, or that the plaintiff is unable to determine that fact after a reasonable effort.

If the creditor submits a copy of the affidavit that was filed with the court prior to the date of the judgment, we will approve the application initially and send it to the member. Not following this mandatory procedure does not make the judgment void nor does it necessarily mean that we will not be able to honor the application. It does make the judgment voidable at the court's option upon a proper showing of certain proof by the defendant. However, to use the military involuntary allotment process, a creditor must comply with the statute.

Pursuant to the implementing regulation, we are to ensure that the procedural provisions of the SCRA have been complied with prior to starting an involuntary allotment for commercial debt against a military member. Therefore, we would not be able to start an involuntary allotment based on a judgment that does not comply with the SCRA. Also, because the SCRA states that these procedures must be followed prior to a default judgment being issued, there is no way for a creditor to go back and remedy any deficiency aside from vacating the judgment and starting the process again to comply with the SCRA after the fact.


 

Updated: April 3, 2011