(a) The following procedures apply to the processing of debt complaints against members of the Military Services.
(1) It is incumbent on those submitting indebtedness complaints to show that they have met the disclosure requirements of the Truth in Lending Act (15 U.S.C. 1601 note, 1601-1614, 1631-1646, 1661-1666j, and 1667-1667e) and Federal Reserve Board Regulation Z (12 CFR 226), and that they complied with the Standards of Fairness (appendix B to this part).
(2) Creditors subject to Federal Reserve Board Regulation Z (12 CFR 226), and assignees claiming thereunder, shall submit with their debt complaint an executed copy of the Certificate of Compliance (appendix A to this part), and a true copy of the general and specific disclosures provided the member of the Military Service as required by the Truth in Lending Act (15 U.S.C. 1601 note, 1601-1614, 1631-1646, 1661-1666j, and 1667-1667e). Debt complaints that request assistance but do not meet these requirements will be returned without action to the claimant.
(3) A creditor not subject to Federal Reserve Board Regulation Z (12 CFR 226), such as a public utility company, shall submit with the request a certificate that no interest, finance charge, or other fee is in excess of that permitted by the law of the State in which the obligation was incurred.
(4) A foreign-owned company having debt complaints shall submit with its request a true copy of the terms of the debt (English translation) and shall certify that it has subscribed to the Standards of Fairness (appendix B to this part).
(5) Debt complaints that meet the requirements of this part shall be processed by Department of Defense Components. “Processed” means that Heads of the Department of Defense Components, or designees, shall:
(i) Review all available facts surrounding the transaction forming the basis of the complaint, including the member's legal rights and obligations, and any defenses or counterclaims the member may have.
(ii) Advise the member concerned that:
(A) Just financial obligations are expected to be paid in a proper and timely manner, and what the member should do to comply with that policy;
(B) Financial and legal counseling services are available under DoD Directive 1344.7[3] in resolving indebtedness; and
(C) That a failure to pay a just debt may result in the creditor obtaining a judgment from a court that could form the basis for collection of pay from the member pursuant to an involuntary allotment.
(iii) If a member acknowledges a debt as a result of creditor contact with a DoD Component, advise the member that assistance and counseling may be available from the on-base military banking office, the credit union serving the military field of membership, or other available military community service organizations.
(iv) Direct the appropriate commander to advise the claimant that:
(A) Those aspects of DoD policy prescribed in 32 CFR part 112.4, are pertinent to the particular claim in question; and
(B) The member concerned has been advised of his or her obligations on the claim.
(v) The commander's response to the claimant shall not undertake to arbitrate any disputed debt, or admit or deny the validity of the claim. Under no circumstances shall the response indicate whether any action has been taken, or will be taken, against the member as a result of the complaint.
(b) The following procedures apply to the processing of involuntary allotments from the pay of members of the Military Services.
(1) Involuntary allotment application.
(i) Regardless of the Service Affiliation of the member involved, with the exception of members of the Coast Guard an application to establish an involuntary allotment from the pay of a member of the Military Services shall be made by sending a completed DD Form 2653, “Involuntary Allotment Application” (appendix C to this part) to the appropriate address listed below. Applications sent to any other address shall be returned without action to the applicant.
(For Army, Navy, Air Force, or Marine Corps)
Defense Finance and Accounting Service, Cleveland Center, Code L, P.O. Box 998002, Cleveland, OH 44199-8002
(For Coast Guard only)
Coast Guard Pay and Personnel Center (LGL), 444 S.E. Quincy Street, Topeka, KS 66683-3591
(ii) Each application must include a copy of the final judgment certified by the clerk of court and such other documents as may be required by § 113.6(b)(1)(iv).
(iii) A garnishment summons or order is insufficient to satisfy the final judgment requirement of § 113.6(b)(1)(ii) and is not required to apply for an involuntary allotment under this part.
(iv) Involuntary allotment applications must contain the following information, certifications, and acknowledgment:
(A) The full name, social security number, and branch of Service of the military member against whose pay an involuntary allotment is sought. Although not required, inclusion of the member's current duty station and duty address on the application form will facilitate processing of the application.
(B) The applicant's full name and address. If the applicant is not a natural person, the application must be signed by an individual with the authority to act on behalf of such entity. If the allotment is to be in favor of a person other than the original judgment holder, proof of the right to succeed to the interest of the original judgment holder is required and must be attached to the application.
(C) The dollar amount of the judgment. Additionally, if the judgment awarded interest, the total dollar amount of the interest on the judgment accrued to the date of application.
(D) A certification that the judgment has not been amended, superseded, set aside, or satisfied; or, if the judgment has been satisfied in part, the extent to which the judgment remains unsatisfied.
(E) A certification that the judgment was issued while the member was not on active duty (in appropriate cases). If the judgment was issued while the member was on active duty, a certification that the member was present or represented by an attorney of the member's choosing in the proceedings, or if the member was not present or represented by an attorney of the member's choosing, that the judgment complies with the Soldiers' and Sailors' Civil Relief Act of 1940, as amended (50 U.S.C. appendix sections 501-591).
(F) A certification that the member's pay could be garnished under applicable State law and section 5520a(k) of the United States Code, if the member were a civilian employee.
(G) A certification that, to the knowledge of the applicant, the debt has not been discharged in bankruptcy, nor has the member filed for protection from creditors under the bankruptcy laws of the United States.
(H) A certification that if the judgment is satisfied prior to the collection of the total amount through the involuntary allotment process, the applicant will provide prompt notice that the involuntary allotment must be discontinued.
(I) A certification that if the member overpays the amount owed on the judgment, the applicant shall refund the amount of overpayment to the member within 30 days of discovery or notice of the overpayment, whichever, is earlier, and that if the applicant fails to repay the member, the applicant understands he or she may be denied the right to collect by involuntary allotment on other debt reduced to judgments.
(J) Acknowledgment that as a condition of application, the applicant agrees that neither the United States, nor any disbursing official or Federal employee whose duties include processing involuntary allotment applications and payments, shall be liable for any payment or failure to make payment from moneys due or payable by the United States to any person pursuant to any application made in accordance herewith.
(v) The original and three copies of the application and supporting documents must be submitted by the applicant to DFAS.
(vi) A complete “application package” (the DD Form 2653, supporting documentation, and three copies of the application and supporting documents), is required for processing of any request to establish an involuntary allotment pursuant to this part and 32 CFR part 112.
(vii) Applications that do not conform to the requirements of this part shall not be processed. If an application is ineligible for processing, the application package shall be returned to the applicant with an explanation of the deficiency. In cases involving repeated false certifications by an applicant, the designated DFAS official may refuse to accept or process additional applications by that applicant for such period of time as the official deems appropriate to deter against such violations in the future.
(2) Processing of involuntary allotment applications.
(i) Promptly upon receipt of DD Form 2653 (Appendix C to this part), the designated DFAS official shall review the “application package” to ensure compliance with the requirements of this part. If the application package is complete, the DFAS official shall:
(A) Complete Section I of DD Form 2654, “Involuntary Allotment Notice and Processing” (Appendix D to this part), by inserting the name, social security number, rank, and branch of service of the military member against whom an application for involuntary allotment is being processed. Additionally, the DFAS official shall provide the due date for receipt of a response at DFAS. The due date shall be 90 days from the date DFAS mails the DD Form 2654 to the commander and member concerned as provided for in § 113.6(b)(2)(i)(B).
(B) Mail one copy of the application package to the member and two copies of the application package, along with DD Form 2654, to the commander of the military member or other official as designated by the Military Service concerned during times of war, national emergency, deployment, or other similar circumstances, who may act for the commander, provided the Military Service concerned has provided DFAS with the name or position of the official and the appropriate address (hereinafter, the meaning of the term “commander” includes such other official).
(C) Within 60 days of mailing the copies of the application package and DD Form 2654, DFAS shall provide notice to the member and the member's commander that automatic processing of the involuntary allotment application shall occur if a response (including notice of an approved extension as authorized in § 113.6(b)(2)(iii)(B) and (F), is not received by the due date specified in Section I of DD Form 2654. In the absence of a response, DFAS may automatically process the involuntary allotment application on the fifteenth calendar day after the date a response was due. When DFAS has received notice of an extension, automatic processing shall not begin until the fifteenth calendar day after the approved extension date.
(D) Retain the original of the application package and DD Form 2654.
(ii) Upon receipt of an application, the commander shall determine if the member identified in Section I of DD Form 2654 is assigned or attached to the commander's unit and available to respond to the involuntary allotment application. If the member is not assigned or attached, or not available to respond (e.g., retired, in a prisoner of war status, or in a missing in action status), the commander will promptly complete Section II of DD Form 2654 and attach appropriate documentation supporting the determination. The commander will then mail the application package and DD Form 2654 to DFAS. Section II shall also be used by the commander to notify DFAS of extensions beyond the due date for a response contained in Section I of DD Form 2654. When such extensions are authorized, the commander will complete Section II, make a copy of Sections I and II, and promptly mail the copy to DFAS.
(iii) Within 5 days of receipt of an application package and DD Form 2654 from the designated DFAS official, the commander shall notify the member of the receipt of the application, provide the member a copy of the entire application package, and counsel the member using and completing Section III of DD Form 2654 about the following:
(A) That an application for the establishment of an involuntary allotment for the lesser of 25 percent of the member's pay subject to involuntary allotment or the maximum percentage of pay subject to garnishment proceedings under the applicable State law has been received.
(B) That the member has 15 calendar days from the date of receipt of the commander's notice to complete Section IV of DD Form 2654. That for good cause shown, the commander may grant an extension of reasonable time (normally not exceeding 30 calendar days) to submit a response. That during times of deployment, war, national emergency, assignment outside the United States, hospitalization, or other similar situations that prevent the member from obtaining necessary evidence or from responding in a timely manner, extensions exceeding 30 calendar days may be granted. That if the member fails to respond within the time allowed, the commander will note the member's failure to respond in Section V of DD Form 2654 and send the form to DFAS for appropriate action.
(C) That the member's response will either consent to the involuntary allotment or contest it.
(D) That the member may contest the application for any one of the following reasons:
(1) There has not been compliance with the procedural requirements of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended (50 U.S.C. appendix sections 501-591) during the judicial proceeding upon which the involuntary allotment application is sought.
(2) “Exigencies of military duty” (as defined in 32 CFR part 112.3(d)) caused the “absence” of the member from appearance in a judicial proceeding forming the basis for the judgment upon which the application is sought.
(3) Information in the application is patently false or erroneous in material part.
(4) The judgment has been fully satisfied, superseded, or set aside.
(5) The judgment has been materially amended, or partially satisfied. When asserting this defense, the member shall include evidence of the amount of the judgment that has been satisfied.
(6) There is a legal impediment to the establishment of the involuntary allotment (for example, the judgment debt has been discharged in bankruptcy, the judgment debtor has filed for protection from the creditors under the bankruptcy laws of the United States, the applicant is not the judgment holder nor a proper successor in interest to that holder, or the applicant has been enjoined by a Federal or state court from enforcing the judgment debt).
(7) Or other appropriate reasons that must be clearly specified and explained by the member.
(E) That, if the member contests the involuntary allotment, the member shall provide evidence (documentary or otherwise) in support thereof. Furthermore, that any evidence submitted by the member may be disclosed to the applicant for the involuntary allotment.
(F) That the member may consult with a legal assistance attorney, if reasonably available, or a civilian attorney at no expense to the government. That if a legal assistance attorney is available, the member should immediately arrange for an appointment. That the member may request a reasonable delay from the commander to obtain legal assistance (in cases where an approved delay will cause DFAS to receive the member's response after the due date identified in Section I of DD Form 2654, the commander must immediately notify the designated DFAS official of the delay, the date for an expected response, and the reason for the delay by completing Section II of DD Form 2654 and forwarding a copy of Sections I and II to DFAS). Additionally, that requests for extensions of time based on the need for legal assistance shall be denied to members who fail to exercise due diligence in seeking such assistance.
(G) That if the member contests the involuntary allotment on the grounds that exigencies of military duty caused the absence of the member from the judicial proceeding at which the judgment was rendered, then the member's commander shall review and make the final determination on this contention, and notify the designated DFAS official of the commander's decision by completing Section V of DD Form 2654 and forwarding the form to DFAS.
(1) In determining whether exigencies of military duty caused the absence of the member, the commander at the level designated by the Service concerned shall consider the definition of “exigencies of military duty” (as defined in 32 CFR part 112.3(d)).
(2) Additionally, consideration shall be given to whether the commander at the time determined the military duties in question to be of such paramount importance that they prevented making the member available to attend the judicial proceedings, or rendered the member unable to timely respond to process, motions, pleadings, or orders of the court.
(H) That if the member contests the involuntary allotment on any basis other than exigencies of military duty, the application package and DD Form 2654 shall be returned to the commander who shall forward it to the designated DFAS official for appropriate action.
(I) That if the member fails to respond to the commander within the time allowed under § 113.6(b)(2)(iii)(B), the commander shall notify the designated DFAS official of the member's failure to respond by completing Section V of DD Form 2654, and forwarding the form to DFAS.
(iv) After counseling the member in accordance with § 113.6(b)(2)(iii)(A)-(I), the commander shall:
(A) Date and sign Section III of DD Form 2654.
(B) Obtain the member's acknowledgment of counseling by having the member sign the appropriate space on Section III of DD Form 2654.
(C) Determine if the member consents to the involuntary allotment or needs the time authorized under this part to review the application package and take appropriate action. If the member consents to the involuntary allotment, the commander shall direct the member to appropriately complete Section IV of DD Form 2654. The commander must then complete the appropriate item in Section V and promptly forward the completed DD Form 2654 to the designated DFAS official.
(D) Complete the appropriate items in Section V of DD Form 2654 when the member fails to respond within the time authorized for a response, or asserts that exigencies of military duty caused the absence of the member from an appearance in the judicial proceeding upon which the Involuntary Allotment Application is sought.
(1) In determining whether exigencies of military duty caused the absence of the member, the commander, at the level designated by the Service concerned, shall consider the definition of “exigencies of military duty” (as defined in 32 CFR part 112.3(d)), the evidence provided by the member, any other reasonably available evidence (e.g., a copy of the member's personnel record), and whether the commander at the time determined the military duties in question to be of such paramount importance that they prevented making the member available to attend the judicial proceedings, or rendered the member unable to timely respond to process, motions, pleadings, or orders of the court.
(2) The evidentiary standard for a commander to determine whether existences of military duty caused the absence of the member from an appearance in the judicial proceeding upon which the Involuntary Allotment Application is sought is a “preponderance of the evidence” (as defined in § 113.3(d) of this part).
(3) If the commander has made a determination on exigencies of military duty, the commander must insert in Section V of DD Form 2654, the title and address of the appeal authority.
(E) Promptly following the date the member's response is due to the commander as determined by § 113.6(b)(2)(iii)(B), ensure that the DD Form 2654 is appropriately completed and mail the form, along with any response received from the member, to DFAS.
(F) Provide the member a copy of the completed DD Form 2654 within 5 days of mailing to the designated DFAS official.
(v) Upon receipt of DD Form 2654 and any additional evidence submitted by the member, the designated DFAS official shall conduct a review of the entire application package, DD Form 2654, and any evidence submitted by the member, to determine whether the application for an involuntary allotment should be approved and established.
(A) In those cases where the member's commander has completed Section V of DD Form 2654, and determined that exigencies of military duty caused the absence of the member from an appearance in a judicial proceeding upon which the involuntary allotment application is sought, the designated DFAS official shall deny the involuntary allotment application and provide the applicant written notice of the denial and the reason therefor. The designated DFAS official shall also advise the applicant that:
(1) The responsibility for determining whether exigencies of military duty existed belonged to the member's commander and the Military Department concerned.
(2) The commander's decision may be appealed within 60 days of the date DFAS mailed the notice of the decision to the applicant.
(3) An Appeal must be submitted to the appeal authority at the address provided by DFAS (as found in Section V of the DD Form 2654) in their written notice of denial, and that an appeal submitted to an appeal authority and address different from the one provided by DFAS may be returned without action.
(4) An appeal must be submitted in writing and contain sufficient evidence to overcome the presumption that the commander's exigency determination was correct.
(5) The appellate authority shall decide an appeal within 30 days of its receipt and promptly notify the applicant in writing of the decision. The 30 day decision period may be extended during times of deployment, war, national emergency, or other similar situations.
(6) If an appeal is successful, the applicant must submit a written request, along with a copy of the appellate authority's decision, to DFAS within 15 days of receipt of the appellate authority's decision.
(B) Upon receiving written notice that an applicant has successfully appealed a commander's determination on exigencies of military duty that resulted in denial of an involuntary allotment application, DFAS shall review the application in accordance with § 113.6(b)(2)(v)(C), and determine whether the involuntary allotment should be approved and initiated.
(C) In all cases, other than as described in § 113.6(b)(2)(v)(A), the designated DFAS official shall deny an involuntary allotment application, and give written notice to the applicant of the reason(s) for denial, if the designated DFAS official determines that:
(1) There has not been compliance with the procedural requirements of the Soldier's and Sailor's Civil Relief Act of 1940, as amended (50 U.S.C. appendix sections 501-591) during the judicial proceeding upon which the involuntary allotment application is sought.
(2) Information in the application is patently false or erroneous in material part.
(3) The judgment has been fully satisfied, superseded, or set aside.
(4) The judgment has been materially amended, or partially satisfied. In such a case, the request for involuntary allotment may be approved only to satisfy that portion of the judgment that remains in effect and unsatisfied; the remainder of the request shall be denied.
(5) There is a legal impediment to the establishment of the involuntary allotment (for example, the judgment debt has been discharged in bankruptcy, the judgment debtor has filed for protection from the creditors under the bankruptcy laws of the United States, the applicant is not the judgment creditor nor a proper successor in interest to that creditor, or the applicant has been enjoined by a Federal or State court from enforcing the judgment debt).
(6) The member's pay is already subject to one or more involuntary allotments or garnishments that equal the lesser of 25 percent of the member's pay subject to involuntary allotment or the maximum percentage of pay subject to garnishment proceedings under the applicable State law.
(7) The applicant has abused the processing privilege (e.g., an applicant, having been notified of the requirements of this part, repeatedly refuses or fails to comply therewith).
(8) Or other appropriate reasons that must be clearly explained to the applicant.
(D) In all cases other than as described in § 113.6(b)(2)(v) (A) and (C), the designated DFAS official shall approve the involuntary allotment application and establish an involuntary allotment against the pay subject to involuntary allotment of the member.
(vi) The designated DFAS official shall, at any time after establishing an involuntary allotment, cancel or suspend such allotment and notify the applicant of that cancellation if the member concerned, or someone acting on his or her behalf, submits legally sufficient proof, by affidavit or otherwise, that the allotment should not continue because of the existence of the factors enumerated in § 113.6(b)(2)(v)(A) and (C)(1)-(8).
(3) Payments.
(i) Payment of an approved involuntary allotment under 32 CFR part 112 and this part shall commence within 30 days after the designated DFAS official has approved the involuntary allotment.
(ii) Payments under this part shall not be required more frequently than once each month, and the designated official shall not be required to vary normal pay and disbursement cycles.
(iii) If the designated DFAS official receives several applications on the same member of a Military Service, payments shall be satisfied on a first-come, first-served basis.
(iv) Payments shall continue until the judgment is satisfied or until canceled or suspended.
(A) DFAS shall collect the total judgment, including interest when awarded by the judgment. Within 30 days following collection of the amount of the judgment, including interest as annotated by the applicant in Section I of DD Form 2654, the applicant may submit a final statement of interest that accrued during the pay-off period. This final statement of interest request must be accompanied by a statement of account showing how the applicant computed the interest amount. DFAS will collect this post-application interest provided it is an amount owed pursuant to the judgment. DFAS shall not accept any further interest requests.
(B) Interest or other costs associated with the debt forming the basis for the judgment, but not included as an amount awarded by the judgment, shall not be paid to applicants for involuntary allotments.
(v) If the member is found not to be entitled to money due from or payable by the Military Services, the designated official shall return the application and advise the applicant that no money is due from or payable by the Military Service to the member. When it appears that pay subject to an involuntary allotment is exhausted temporarily or otherwise unavailable, the applicant shall be told why and for how long that money is unavailable, if known. Involuntary allotments shall be canceled on or before the date a member retires, is discharged, or is released from active duty. The designated DFAS official shall notify the applicant of the reason for cancellation.
(vi) Upon receiving notice from an applicant that a judgment upon which an involuntary allotment is based has been satisfied, vacated, modified, or set aside, the designated DFAS official shall promptly adjust or discontinue the involuntary allotment.
(vii) The Under Secretary of Defense (Comptroller) may, in DoD 7000.14-R[4] Volume 7, Part A, designate the priority to be given to involuntary allotments pursuant to 32 CFR part 112 and this part, among the deductions and collections taken from a member's pay, except that they may not give precedence over deductions required to arrive at a member's disposable pay for garnishments or involuntary allotments authorized by statute for alimony and child support payments. In the absence of a contrary designation by the Comptroller, all other lawful deductions (except voluntary allotments by the member) and collections shall take precedence over these involuntary allotments.