Delinquent debts are referred to various private sector entities and federal agencies in effort to collect the delinquent balance. Referrals include Credit Reporting Agencies, the Credit Alert Interactive Verification Reporting System, Department of the Treasury and the Department of Justice.
Credit Reporting Agencies
Accounts are referred to credit reporting agencies within 60 days of the issuance of our second collection notice if the debtor does not have an approved payment plan or some other action that will lead to liquidation of the debt.
Credit Alert Interactive Verification Reporting System
Accounts are referred to this service within 30 days of the issuance of a letter notifying the debtor of the referral. This is a Federal government database of delinquent Federal debtors, which allows authorized individuals from participating Federal agencies and approved private lenders to access the database for the purpose of pre-screening applicants for loans issued by, or guaranteed by, the Federal government. The information is used to determine credit worthiness.
Department of the Treasury
Most Government agencies, including VA, refer debts delinquent more than 180 days to the Department of the Treasury for collection under the Treasury Offset Program and Government-wide cross-servicing.
Treasury Offset Program
The Department of the Treasury collects debts by reducing or withholding Federal and State payments. These offsets are authorized by the Debt Collection Improvement Act of 1996.
- Government-wide Cross-Servicing is the referral of debts to other Federal agencies for specialized handling or to private collection agencies under contract with the Department of the Treasury.
- Debt Collection Improvement Act of 1996 also provides for administrative wage garnishment against debtors employed in the private sector and publication of debtor information. Visit Department of Treasury’s Administrative Wage Garnishment site or the DCIA Factsheets for additional information.
Department of Justice
If the collection tools mentioned above are not successful, we may refer accounts for litigation by U.S. Attorneys or VA regional counsel.