Out-of-Service Debt
Private Collection Agencies

Volume 5, Chapter 32, of the Department of Defense Financial Management Regulation (DoD FMR) 7000.14-R , requires that the DFAS refer delinquent debts to private collection agencies for collection assistance. The collection agencies utilized are under contract administered by the Department of the Treasury. The private collection agencies that provide collection assistance to the DFAS and other federal agencies are:

Only those accounts that become delinquent are referred to the collection agencies. Accounts may be referred up to two times. Once an account has been referred to a collection agency, you must contact the collection agency directly to discuss all aspects of your account, including payment arrangements.

In addition to collecting your delinquent account directly from you, the collection agencies also have the authority to contact your employer to have a portion of your wages withheld and sent to us to pay your delinquent account. This process is called administrative wage garnishment and is authorized by 31 United States Code §3720D . The DoD FMR Volume 5 prescribes the use of administrative wage garnishment according to Department of the Treasury implementing instructions about due process, including review and the possibility of a hearing, published at 31 Code of Federal Regulations (CFR) § 285.11. Review, reconsideration, and hearing requests will be handled by the DFAS under the rules set out at 31 CFR § 285.11 and in chapter 30, Volume 5 of the DoD FMR . If the collection agency is unsuccessful in its attempts to collect the account directly from you, the collection agency will contact your employer to initiate the administrative garnishment of your wages to pay your account. Before this occurs, you will receive a letter from the collection agency about administrative wage garnishment. Once initiated, you must contact the collection agency regarding any questions you may have concerning the administrative garnishment of your wages. As necessary, the collection agency will involve the DFAS should there be any questions about the existence or amount of your account or the amount your employer must withhold on your paydays to satisfy the administrative wage garnishment action.