VA Mortgages and Social Security
When you are in debt to the VA, it s required to take various actions in order to get its money returned. If this happens, the VA will try to contact you in many different ways, but if these contact attempts are unsuccessful, the VA will take further action by garnishing your Veterans Benefits and even your Social Security benefits.
The Debt Collection Act of 1982 allows the VA to take money from the Social Security benefits of individuals who owe it money if they have not made other repayment arrangements. The Debt Collection Improvement Act of 1996 also gives the VA authority to garnish the Social Security benefits of people who owe the VA money. This means that the VA can take your Social Security benefits until the amount you owe has been fully repaid.
There are steps you can take to change the amount the VA takes from your Social Security or stop the VA from taking this money altogether. You can:
- Complete a Financial Status Report at the government site. This report provides the VA with your financial information so it can see what an affordable repayment amount is for your individual circumstances. The VA may reduce the amount garnished from your Social Security if your income and expenses show a need for reduction.
- Give the government a guaranteed source of collection. Even if you make payments to the VA, it may still garnish your Social Security unless you show you have another guaranteed income source it can garnish, such as earned wages.
- Pay the amount you owe to the VA. Once full payment is received your benefits will be fully reinstated and you may pre-qualify for a home loan. In addition, paying the full amount is a good idea because you avoid future late fees and other fees associated with collection of the debt.
It is very important that you stay in contact and let the VA know how much you can afford to pay. This gives you the opportunity to set up your own payment arrangements and avoid Social Security benefit garnishment.
The Department of the Treasury is responsible for recouping money people owe the VA. Once the VA hands over your debt to the Department of the Treasury, making payments directly to the VA won't change the amount of Social Security benefits that are garnished. In addition, once the Department of Treasury takes over, it is extremely difficult to change the garnishment amount.
See a related article: Getting a Second VA Loan
WHAT DO I NEED TO GET A VA LOAN?
The first thing that everyone needs in order to receive a VA Loan is a Certificate of Eligibility. First-time and experienced users alike will need this certificate in order to begin the process. This certificate can be conveniently mailed to you if you fill out this short form to obtain a VA Certificate of Eligibility.
Pre-qualify for a VA home purchase
GET ADVICE FROM A VA LOAN SPECIALIST
Specialists are ready to answer your questions and concerns! Whether you need help determining if a Veteran Home Loan is right for you, or just have a general query, contact a VA Mortgage Specialist online or by calling 800-405-6682.
Read more about the Veterans Benefit Act of 2004.
