Va Taking Money Out Of Your Bank Account Question

[tssnave]

Just how far is the VA's reach into your banking?

I know I've read about the VA taking money out of the account that they put the money into and it seems that years ago Free Spirit** wrote in a post that the VA took money out of another account that she had at the same bank that her husband's VA payments went to even though the husband was not on that account.

1. Has anyone else had the VA take money out of their account?

2. How about another account at the same bank that is NOT the one their VA check goes into?

3. Has the VA ever gone into accounts held in another bank where they do NOT deposit your VA check?

4. If not yourself, had you heard firsthand from someone who has had this problem?

5. **If Free Spirit is not the member who wrote about her banking issues with the VA after her husband passed away, does anyone remember who it was? They would have been posting in 2006/2007.

Thanks,

TS Snave

[jerrbilly]

Yes, if a deposit hasn't "cleared" then they can reverse it. If it hasn't cleared you can't use it yet anyway.

Jerr

Folks there is a need to read the small print on the application for Direct Deposit. Anyone that deposits electronically by las has the legal right to do a reversal. It happened to me but It was not the VA.

Here is the reg covering revocations.

31.cfr 210.4 revocation

J

[tssnave]

Free,

Thanks so much for your reply. Yours was one of the first threads I read on hadit years ago and to this day it still boggles my mind how the VA could take out money from your individual account after your joint account was closed. The one thing I don't want if I die is my spouse to have this kind of hassle but with everything concerning the VA, we don't get a choice.

Thanks again,

TS

[free_spirit_etc]

I think the other account issue was actually the result of 2 separate agreements.

One agreement is the agreement with the VA that they have the right to reclaim money they have deposited into your account from your account without having to go through all the steps to show you owe the money and do a levy first.

At the end of the day (which with the VA can take a long time) whether you owe the money or not will be FINALLY decided - and whomever the rightful owner is should eventually end up with it. The issue becomes who gets to keep the money while the issue is being decided. With Direct Deposit - the VA can take the money from your account - and they get to keep it while it is being decided.

The other agreement is apparently an agreement that you have with the bank that if there is not money in one of your accounts to cover a reclamation or levy, they can take it from another account you have with them.

Hmmmm - I guess there was a third agreement - in that as a joint owner of the account that had the agreement with the VA - I was "responsible" for any funds the VA wanted back - though I actually had no agreement with the VA (I did not sign the Direct Deposit form).

I think in most cases, the VA puts a freeze on the funds a bit quicker than they did in my case. In my case, it took several months - and I had already closed the joint checking account by that time.

A possible alternative is to have an account at a different bank to use for living expenses. As soon as the VA deposits the money into the account at one bank - move it to your living expenses account at the OTHER bank.

The VA shouldn't have the authority to take the money (or even freeze it) at the OTHER bank - UNTIL they take the steps of determining if you actually owe the money, giving you a chance to dispute that you owe the money, giving you a chance to pay the money if you do owe it, etc.

If you DO owe the money - you will have to repay it. But the issue is who gets to hold onto the money while the issue is being decided.

I would venture to guess that if YOU are the one holding onto the money - it will NOT take the VA two years to address the issue. If THEY are holding the money, they don't seem to get into any hurry to see if it rightfully belongs to you.

So it might be best to figure out a way to be the one who gets to keep the money until the issue is decided (i.e. an account at a different bank). Otherwise a widow might find herself in the position of discovering her checks for living expenses bounced because the VA put a freeze on her account - or reclaimed the money from her account - and no one (neither the bank or the VA) even bothered to notify her that it occurred.

Free,

Thanks so much for your reply. Yours was one of the first threads I read on hadit years ago and to this day it still boggles my mind how the VA could take out money from your individual account after your joint account was closed. The one thing I don't want if I die is my spouse to have this kind of hassle but with everything concerning the VA, we don't get a choice.

Thanks again,

TS

Edited January 13, 2010 by free_spirit_etc

[broncovet]

I am pretty sure about this. As was pointed out, when you agree to direct deposit, you are agreeing that the money can go IN or OUT..in the event of an error.

The IRS has a "due process" exemption. That is, if you owe the IRS money, the IRS does not have to go to court to suck it out of your accounts, they just do it.

About everyone else has to go through due process. In other words, if I thought you owed me money, I could go to the judge, and file and allege you owe me ......dollars. Of course you can dispute that..you can dispute the amount, or the debt entirely. If the judge rules in your favor, then you can also ask the judge for a writ of garnishment, which you could take to the appropriate bank(s) and demand they give you your money.

It gets "grey" for me with the VA. If the VA sends you a check, it comes from the treasury department...the same branch as the IRS.

In that way, the VA could take money out of any account it wants to..without due process, just like the IRS can/does.

[cowgirl]

Good queston and discussion tss! I recieved retroactive compensation pay, directly used the funds and then short time later recieved a 'indebt/overpayment' letter. Amazing how quick and very detailed the letter was. My gripe, letter comes in late on a FRIDAY (I don't usually yell) of all things! Stressed entire weekend, me with depression already and called first light Monday morning - happy-go-lucky person ' oh let me check' 'oh, its no big deal just a glitch in the system thatkicks these out automatically'. Thank God they didn't take the money xx,xxx.xx. No one should take money without 'official due process' advance notice and request in my opinion.

Yes, tss and free, I recall discussing this back some years - really got me upset for my freind free & son not being treated respectfully.

Yeah, signing off now, tmj, ow, Ow....

Hugs.

Cowgirl'up!

-

Just how far is the VA's reach into your banking?

I know I've read about the VA taking money out of the account that they put the money into and it seems that years ago Free Spirit** wrote in a post that the VA took money out of another account that she had at the same bank that her husband's VA payments went to even though the husband was not on that account.

1. Has anyone else had the VA take money out of their account?

2. How about another account at the same bank that is NOT the one their VA check goes into?

3. Has the VA ever gone into accounts held in another bank where they do NOT deposit your VA check?

4. If not yourself, had you heard firsthand from someone who has had this problem?

5. **If Free Spirit is not the member who wrote about her banking issues with the VA after her husband passed away, does anyone remember who it was? They would have been posting in 2006/2007.

Thanks,

TS Snave

[free_spirit_etc]

I don't think the IRS just sucks money out of someone's bank account as a general rule. They usually try to collect from the person first. Granted, they CAN put a levy on an bank account easier than an ordinary person can - but I don't think it is their practice to take money from your bank without notifying you that you owed them - and giving you a chance to pay or dispute the debt.

I think the VA's ability to take money from your account stems from the Direct Deposit authorization with that bank.

This site has some information on Federal Tax Levies

http://law.freeadvice.com/tax_law/income_t...-tax-levies.htm

It indicates that the IRS has to give you at least a 30 day notice that it intends to issue a Levy, give you the opportunity to respond, etc. before they can levy your bank account.

And even when they issue the levy, you have some rights to object, pay the funds, make an installment agreement, etc. before they actually take the funds.

I do not think the fact that VA checks are issued by the Department of the Treasury gives the VA ANY authority to just take money they THINK you might owe from any bank account you own without certain types of due process. Granted, the due process might be different than it is for money owed to a non-governmental agency or person. And they might not have to sue you in court - but I think they would have to notify you, prove you owed the money, and give you certain types of due process before they could levy an account at a bank they have no Direct Deposit authorization form for.

Free

I am pretty sure about this. As was pointed out, when you agree to direct deposit, you are agreeing that the money can go IN or OUT..in the event of an error.

The IRS has a "due process" exemption. That is, if you owe the IRS money, the IRS does not have to go to court to suck it out of your accounts, they just do it.

About everyone else has to go through due process. In other words, if I thought you owed me money, I could go to the judge, and file and allege you owe me ......dollars. Of course you can dispute that..you can dispute the amount, or the debt entirely. If the judge rules in your favor, then you can also ask the judge for a writ of garnishment, which you could take to the appropriate bank(s) and demand they give you your money.

It gets "grey" for me with the VA. If the VA sends you a check, it comes from the treasury department...the same branch as the IRS.

In that way, the VA could take money out of any account it wants to..without due process, just like the IRS can/does.