The Department of Defense requires sound financial management of all military members. Service members are expected to pay their debts on time without interruption. When this does not happen, service member pay is subjected to garnishment for commercial debt, child support, alimony and bankruptcy. The creditor has a right to obtain compensation for an unpaid debt by seeking a judgment against the service member and requesting an involuntary allotment, commonly referred to as a garnishment.
Commercial Debt
In 1995, Congress authorized the garnishment of military pay for commercial debt, commonly known as consumer debt. Creditors may seek repayment for commercial debt after successfully obtaining a civil judgment against the service member. The creditor receives payment by submitting an involuntary allotment request to the Defense Finance and Accounting Service, or DFAS. The creditor can only take up to 25 percent of the service member's disposable income per month.
Child Support and Alimony
Title 42, Chapter 7, Section 659 of the United States Code authorizes garnishment of active, reserve and retired service member pay, as of January 1, 1975. Up to 50 percent of a service member's weekly disposable pay can be garnished if the member is currently supporting a spouse or minor dependent. Up to 60 percent of disposable pay may be garnished if the service member has no spouse or other dependent children.
Bankruptcy
Military pay can be garnished under Chapter 7 and 13 bankruptcies, provided the garnishment was not received in violation of the Service members' Civil Relief Act, also known as the SCRA. Under the SCRA, default judgments cannot be entered against military service members when their ability to meet the terms of the court order is hindered by military obligation. The court may at its discretion require monthly payments during the stay of the order.
Disposable Income
Money owed to the United States government, obligatory federal deductions such as federal taxes and Medicare payments, insurance premiums and retirement deductions are excluded from garnishment. Disposable income refers to the amount left once all excluded deductions are taken from military pay.
More Than One Garnishment
Child support and alimony payments have priority over commercial debt garnishments. Garnishments are returned when there is no disposable income due to child support or alimony. The creditor or garnishing applicant must reapply once the previous garnishments are satisfied. In the case of the garnishments being a result of child support and alimony payments, the creditor may not receive payment for years. The Defense Finance and Accounting Service will notify the garnishing applicant should this situation arise.
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