VA Mortgages and Social Security
When you are in debt to the VA they are required to take various actions in order to get their money returned to them. They will try to contact you in many different ways, but if these contact attempts are unsuccessful they will take further action by garnishing veteran's benefits, and even Social Security benefits.
The Debt Collection Act of 1982 allows the VA to take money from the Social Security benefits of individuals who own them money if they have not made other repayment arrangements. The Debt Collection Improvement Act of 1996 also gives the VA authority to garnish Social Security benefits of people who are in debt with them. This means that if you owe the VA they can take your Social Security benefits until the time when the amount you owe has been fully repaid.
There are steps you can take in order to change the amount the VA takes from your Social Security or stop them 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 that they can see what an affordable repayment amount is for your individual circumstances. They 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 they may still garnish your Social Security unless you show them that you have another guaranteed income source they can garnish, like 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. This may also reduce the amount of total debt because by paying the debt off you are avoiding future late fees and other fees that apply for the collection of this debt.
In order to recapture the money people owe to the VA the Department of the Treasury handles the debt collection. This is why making payments directly to the VA won't change the amount of Social Security benefits that are garnished. Once the debt is handed over to the Treasury Department it is more difficult to change the garnishment amount. This is why it is so important to always answer letters to the VA if you owe them money. By staying in contact and letting the VA know how much you can afford to pay, you can set up your own payment arrangements and avoid Social Security benefit garnishment.
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 their 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 Eligbility.
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 specific query, contact a VA mortgage specialist online or by calling 800-405-6682.
Read more about the Veterans Benefit Act of 2004.
