My husband was AD in the Navy for 9 years before getting out in 2005 and ended up recieving VA disability as well.

We filed Bankruptcy in 2002 and apparently left off our AAFES account. Being without ID and unable to go into the store to make a payment and unable to access our account online to make a payment it became delinquent. Military Star never contacted us or sent a bill so I was unclear what happened to it.. still, I agree no excuse. With my husband just getting out of the military and not getting a job finances were tight so that bill got put on the back burner.

Fast forward to this year. I myself joined the National Guard over a year ago and while I was away for training my husband said AAFES finally sent a bill regarding the account. It was now turned over to the Treasury Offset program and they would collect our tax return. My husband wasn't sure what to do with it and waited the few months until I arrived from my IET. Then we get a collection letter from OSI Collection Services Inc. They added $411 for interest and Penalties, $480 for collection fee's and $50 for administrative fees. I was in shock they could add such charges. I played phone tag with AAFES for a few weeks but finally got in touch with one woman to try and set up payments. She said it would be taken out of our taxes and to "ignore the collections agency." Those were her exact words. I did call the collections agency to touch bases and let them know what was going on and they said they were pursuing collection.

I just filed my taxes so it won't get paid too soon, but is it legal for a company to charge that much?

Does anyone have any advice on how to deal with this or avoid wage garnishment? Also, are they allowed to garnish my husbands monthly VA benefits?

You'd think there was more protection or better treatment of issues like this instead of socking it to us in fee's and collection charges. If its illegal for Payday loan companies to collect such high amounts I don't understand how other companies can get away with it.

Thanks for reading this.

MOD HAT OFF and not speaking as a MOD HERE

My two cents....

You left out how much you owe AAFES and without that, how can anyone tell you if the surcharges are excessive?

I would tend to think the bill collecting agency is trying to gouge you with fees because that is how they make money.

The issue is probably out of AAFES hands because they sold your deliquent account already to someone else and wrote off the discount they sold the account for (so many cents per dollar).Whomever purchased the account did so with the expectation they could get the money back plus more.

The fact that you called the collection agency to try and be reasonable......just identified you and your husband as probably a couple likely to pay so they will be probably pursuing you now to get their investment in bad debt back plus profit.

I would try the VA first for credit counseling but if they have nothing then I would lookup via the State of Washington social services if they offer free credit advising services and take your case to them. Since the debt is so old, you were officially in bankruptcy at the time, I think the ball is in your court on how much you want to pay on the dollar for it and you can negotiate.....despite whatever the collection agency says. However, DO NOT take my word for it....get a second opinion from someone that handles credit or bad debt.

BTW, Congrats on passing IET....thats awesome.

Thanks, Erich.

i delt with the same issue when i had a joint account with the ex-husband. they also sent it to treasury offest, and they went and garnished my taxes from this year. it paid the entire amount off, and i got the diffrence back from the irs. i never delt with OSI. when i did try to call them, they refused to work with me reguarding the payment. the treasury offset will only take what was due when the account was closed, they will not add aditional intrest/fees like OSI. if i were you, i would contact treasury offset, and see if you can pay them directly. they may even be willing to take it out of your pay, so you can remove the government debt from your credit. i would deffinatly call them though.

by the time i realized my ex hadn't paid it was too late, and OSI was anything but helpfull. however the reps from treasury offset explained the situation and were very helpful. hope this helps and good luck!