VA Debt Relief Program: Options for Managing Benefit and Copay Debts

The VA debt relief program provides several options through the Department of Veterans Affairs (VA) to help Veterans manage debts from VA benefits or services. Receiving a notice about VA debt, like benefit overpayments or unpaid health care copays, can be stressful. Veterans in this situation should know the VA offers specific ways to get financial help and resolve the debt. Learning about these options is the first step to managing this financial burden.

Understanding Your VA Debt

VA debt usually comes from two main places: benefit overpayments or unpaid health care copays. Knowing how these debts happen can help you figure out how to resolve them.

Common Sources of VA Debt

1. Benefit Overpayments: This happens when a Veteran receives more money than they were eligible for. Common causes include changes in dependency status, income changes affecting pension eligibility, disability rating adjustments, or changes in school enrollment affecting education benefits. Programs where this might occur include:
   • VA Disability Compensation
   • VA Pension
   • Education Benefits (e.g., Post-9/11 GI Bill)  
   • Rogers STEM Scholarship  
   • VET TEC Program  
   • Separation Pay  
   • Attorney Fees related to VA claims  
   • Sometimes, administrative errors or duplicate payments cause overpayments.  
2. Health Care Copays: These debts are from unpaid copayments for VA medical care, services, or prescriptions.  

Debt Notification and Details

The VA usually notifies Veterans about debt through letters mailed by the VA Debt Management Center (DMC) for benefit overpayments, or on billing statements for health care copays. These letters typically explain the amount owed, the reason for the debt, repayment or relief options, and important deadlines.  

Veterans can also check their debt information online through the VA's debt management portal. This portal shows benefit debt notices and medical copay statements.  

• Manage Your VA Debt Online: https://www.va.gov/manage-va-debt/

Remember, VA debt often results from complex processes or life changes reported by the Veteran, not necessarily their fault. Understanding the reason stated in the VA's notice helps choose the best way forward.

Key Options for VA Debt Relief

The VA offers several official ways for Veterans to get help with VA-specific debt. It's best to use these VA channels instead of third-party services, which might not understand VA rules. The right option depends on the debt type, amount, and the Veteran's financial situation.  

1. Repayment Plans

A repayment plan lets Veterans pay back VA debt over time with manageable monthly payments, instead of all at once.

• Benefit Debt Repayment Plans:
  • Short-Term (Under 5 years): For debts repayable within five years, the process is often simpler. A Financial Status Report (VA Form 5655) usually isn't needed. Request online via AskVA, by phone with the Debt Management Center (DMC), or by mail.  
  • Long-Term (5 years or more): If repayment takes five years or longer, you usually need to show financial need by submitting VA Form 5655. Online submission via the VA debt portal is preferred, but mail is also an option.  
• Copay Debt Repayment Plans:
  • For unpaid VA health care copays, use VA Form 1100 (Agreement to Pay Indebtedness) to request a plan. The VA typically expects repayment within three years. Submit Form 1100 to the local VA medical center's business office. New copay charges aren't automatically included; a new request might be needed.  
• How Payments Work:
  • Monthly Benefit Offsets: The VA deducts money from your monthly VA benefits until the debt is paid. You can contact the DMC to potentially arrange smaller deductions as part of a plan.  
  • Direct Monthly Payments: You pay the VA directly each month online (Pay.va.gov), by phone, or by mail. Important: If paying the full balance while receiving benefits, call the DMC first (800-827-0648) to confirm the exact amount, as offsets might have already occurred.

2. Debt Waivers

A debt waiver asks the VA to forgive (waive) all or part of a debt, meaning you wouldn't have to repay the waived amount.

• Eligibility: Waivers are considered if repayment causes undue financial hardship. Key factors include whether the Veteran was without fault in causing the debt (e.g., provided correct info on time) or if the VA made an error. The VA checks if collection would be "against equity and good conscience". Waivers aren't granted if there's evidence of fraud, misrepresentation, or bad faith.
• How to Request a Waiver:
  1. Financial Status Report (VA Form 5655): This form is required. It details your finances for the VA to assess hardship. Without it, the request will be denied.
  2. Personal Statement: A written explanation is needed, detailing the hardship and why you believe you weren't at fault or relied on the funds. Use VA Form 21-4138 or potentially VA Form 10-304 for copay waivers.
  3. Oral Hearing (Optional): You can ask for a hearing to explain your situation in person.  
• Submitting Your Request:
  • The preferred method is online via the VA's debt help portal, which includes Form 5655.  
  • Alternatively, download and mail the forms. For copay waivers, submit Form 5655 online or mail/deliver it to the local VA medical center.
• Critical Deadlines:
  • Absolute Deadline: Waiver requests must reach the VA within 1 year of the first debt notice date. Late requests are denied by law.
  • Collection Hold Deadline: Submit within 30 days (education debt) or 90 days (compensation/pension debt) of the first notice to pause collection during review.  
• Outcomes: The VA's Committee on Waivers and Compromises (COWC) reviews the request. You'll get a written decision: full waiver, partial waiver, or denial. Denials/partial waivers can usually be appealed. If waived, you don't repay that amount. However, waived education debt might reduce your remaining program entitlement.

3. Compromise Offers

A compromise offer proposes settling the VA debt by paying a single lump sum that's less than the total owed.

• Eligibility: The VA considers this if the full debt likely can't be collected due to inability to pay, difficulty enforcing collection, high collection costs, or doubt about winning a legal case.
• How to Make an Offer:
  1. Written Offer: Submit a written offer with the specific lump-sum amount and explain why you're requesting the compromise.
  2. Financial Status Report (VA Form 5655): This form is required to show you can't afford the full debt.
• Submitting Your Offer:
  • Submit online via the VA's debt help portal (includes Form 5655) or mail it to the DMC for benefit debt.
  • For copay debt compromises, submit Form 5655 online or to the local VA facility.  
• Payment: If accepted, the lump sum is usually due within 30 days. Installments are generally not allowed unless a specific agreement is made.
• Decision Authority: Authority varies by debt amount. Local finance chiefs might handle small debts; the COWC handles most up to $100,000. Debts over $100,000 usually need Department of Justice (DOJ) approval. Compromise decisions are typically final and can't be appealed.
• Important Impact - Entitlement Charging: If a debt is compromised, the VA forgives part of it. However, you might lose eligibility for future benefits in that specific VA program (like education or home loans) until the forgiven amount is repaid. Consider this impact carefully.

4. Temporary Hardship Suspension

If you face short-term financial problems, the VA might offer a temporary hardship suspension of debt collection.

• Purpose: This pauses collection actions (like benefit offsets) temporarily during acute hardship (e.g., job loss, natural disaster).
• How to Request: Contact the VA Debt Management Center (DMC) by phone (800-827-0648) or online via AskVA. It's usually less formal than waiver/compromise requests.
• Duration: The suspension is temporary. The VA sets the timeframe, and collection resumes afterward unless other arrangements are made.

Summary Table of Key VA Debt Relief Options

Help Specifically for VA Health Care Copay Debt

While general options apply, there are extra considerations and tools for copay debt.

• Using General Options: Request waivers or make compromise offers for existing copay debt using VA Form 5655 (submit online or to your local VA medical center). Request repayment plans using VA Form 1100 (submit to local VA facility).  
• Hardship Determination for Future Copays (Copay Exemption): If your financial situation worsens significantly, making future VA copays unaffordable, request a Hardship Determination.
  • Purpose: If approved, you're assigned a higher healthcare priority group, exempting you from medical service copays for the rest of the calendar year.  
  • Process: Complete VA Form 10-10HS and submit it with a letter explaining the hardship to your nearest VA medical center's business office.  
  • Limitation: This exemption doesn't cover pharmacy medication copays.  
• Disputing Copay Charges: If you think a copay charge is wrong, you can dispute it. Find dispute info on the VA website.
  • Dispute Copay Charges Info: https://www.va.gov/health-care/pay-copay-bill/dispute-charges/
• Contact for Copay Issues: For questions about copay bills or relief options, contact the VA Health Resource Center (HRC) at 866-400-1238 or your local VA medical center's business office.

How to Request Assistance (Focus on Key Forms)

Using the right forms correctly is key. VA Form 5655 is often central.

VA Form 5655 (Financial Status Report)

• Purpose: This form helps the VA assess your financial situation for relief requests. It's required for benefit debt repayment plans (5+ years), all waivers, and all compromise offers. It documents income, assets, expenses, and debts to evaluate hardship claims. Accuracy is vital.  
• How to Submit:
  • Online (Preferred): Use the VA's secure portal for integrated form completion. It's usually fastest. Link: https://www.va.gov/manage-va-debt/request-debt-help-form-5655/  
  • Mail: Download the PDF, fill it out, and mail it. For benefit debt, send to DMC; for copay debt relief (if not online), send to the local VA business office. DMC Address: U.S. Department of Veterans Affairs, Debt Management Center, PO Box 11930, St. Paul, MN 55111.  
  • Spouses/Dependents: Non-Veterans might need the mail-in PDF option.  

Other Important Forms

• VA Form 1100 (Agreement to Pay Indebtedness): Used for requesting copay debt repayment plans.  
• VA Form 10-10HS (Request for Hardship Determination): Used to request exemption from future health care copays (not pharmacy) due to hardship.  
• VA Form 21-4138 (Statement in Support of Claim) / Written Statement: A clear written statement explaining reasons for waiver/compromise is crucial. Form 21-4138 is often used.  

Getting Help with Forms

If you need help with forms or the process, contact the DMC (benefit debt) or HRC (copay debt). Accredited Veterans Service Organizations (VSOs) also offer free assistance.

Potential Consequences of Not Addressing VA Debt

Ignoring VA debt can lead to serious financial issues as the VA and U.S. Treasury take steps to recover the money.

• Benefit Offsets: The VA can withhold some or all of your monthly benefits (compensation, pension, education) to pay the debt. This can start automatically if you don't respond within the notice timeframe (e.g., 90 days for C&P debt).  
• Treasury Offset Program (TOP): If debt remains unpaid (often after 120 days), the VA refers it to the Treasury. TOP can intercept other federal payments like tax refunds or Social Security (with limits), and state payments.  
• Credit Reporting: While VA policies reduce credit reporting, delinquent VA debt can still potentially be reported, harming your credit score.  
• Other Collection Actions: Treasury referral can also lead to private collection agency involvement or wage garnishment.  

These consequences highlight why it's vital to contact the VA promptly after receiving a debt notice.

Essential VA Contacts and Resources

Use these contacts based on your debt type:

For Benefit Overpayment Debt (Disability, Pension, Education, etc.):

• VA Debt Management Center (DMC)
  • Phone: 800-827-0648 (TTY: 711)  
  • Overseas: +1-612-713-6415  
  • Hours: Mon-Fri, 7:30 a.m. - 7:00 p.m. ET  
  • Online: Ask VA (https://ask.va.gov/) - Category "Veterans Affairs - Debt"  
  • Mail: U.S. Department of Veterans Affairs, Debt Management Center, PO Box 11930, St. Paul, MN 55111  

For VA Health Care Copay Debt:

• VA Health Resource Center (HRC)
  • Phone: 866-400-1238 (TTY: 711)  
  • Hours: Mon-Fri, 8:00 a.m. - 8:00 p.m. ET  
• Local VA Medical Center: Contact the business/health administration office at your nearest facility.  

General VA Information:

• MyVA411 Main Information Line: 800-698-2411 (TTY: 711)  

Key Online Portals:

• Manage Your VA Debt: https://www.va.gov/manage-va-debt/  
• Request Debt Help (Online Form 5655): https://www.va.gov/manage-va-debt/request-debt-help-form-5655/  
• Financial Hardship Assistance (Copays): https://www.va.gov/health-care/pay-copay-bill/financial-hardship/  
• Pay VA Debt Online (Pay.va.gov): https://www.pay.va.gov/  

Crisis Support:

• Veterans Crisis Line: If financial stress causes emotional distress, call 988 then Press 1, Text 838255, or Chat online 24/7.

Conclusion

Dealing with a VA debt notice can be tough, but the VA debt relief program offers multiple ways to get help. Options include repayment plans, waivers, compromise offers, hardship suspensions, or copay exemptions.

The most crucial step is acting quickly after getting a debt notice. Ignoring it can lead to automatic collection and more financial trouble. Review your notice, use VA online resources, and contact the right VA office—DMC for benefit debt, HRC/local facility for copay debt—as soon as possible. The VA is ready to discuss your situation and find a solution.

Frequently Asked Questions