How should I negotiate credit card settlement with USAA?
I have about $75k of credit card debt from medical bills and other expenses with 2 kids in college. I live in CA and have looked into debt management plans, but have a shortfall of about $1000 per month to make the payments. The non profit agency I consulted suggested to consult a bankruptcy attorney to see the best way to protect our $70k equity in our home. I did consult 4 BK attorneys and they all suggested filing chapter 7. I am the sole provider in my household and my wife is not able to work, and one daughter is underemployed even though she just earned her BA and we also have $70k in parent plus student loans. I have $60k in whole life surrender value. I received varying answers on the amount of insurance that I could exempt under 704 plan.
I sought advice in June, and as advised by all 4 attorneys, I stopped paying my credit cards then.
I did consult one additional attorney who has handled thousands of cases in my area and he says that filing chapter 7 would be quite risky as trustees are quite aggressive at present. The other attorneys suggested I use some of the insurance money to pay down student loans, open IRAs for my wife and I for 2013, and perhaps do household repairs. They said to file 90 days later. The last attorney I did contact said that the other attorneys I had consulted did not have enough experience and that they were simply after money and did not really care about my situation. He handles far more cases than the others, and he suggested to try to settle with the credit card companies with the condition that they put in writing that the settlement is satisfies the entire debt and that they also remove derogatory information from my credit report. He says I am better off doing this on my own. He said he could take my money, but he felt the situation might be quite risky. My CPA also suggested this approach.
My creditors are Bank of America, Chase, Citibank, Capital One, and USAA. The idea is to use $50k to use to try to settle the debt. I have not been sued yet, and I am trying to avoid this. Bank of America did cancel two cards. The majority of my debt is with USAA. One concern is if some banks do agree and others don't then I could have trouble filing chapter 7 later. I was told they can go back 2 years, and that preferential payment could be claimed for debts I do pay. I would greatly appreciate some guidance on the best negotiating methods for these particular credit card companies.
How should I negotiate credit card settlement with USAA, BofA, Chase, Citibank, Capital One?
—Leroy
What are the balances owed on each of your USAA accounts, and what types of accounts are they (credit cards, personal loans, auto, etc)? Also indicate in the comment section below if you still have open accounts with USAA, such as checking, savings, auto loan, other. Also, it will help me to know for how long you have had your credit cards and/or loans with them
You did not indicate your income and other expenses, but the fact that you are 1k short of being able to afford a debt management plan through a credit counseling agency, when I estimate you would need roughly 1600 a month to afford the DMP, would make the typical 36 month debt settlement program not all that viable either.
Loans and Credit Cards are Your Largest Debts
I want to focus on USAA accounts to be certain settling is the best option. Depending on how you answer the above questions, you may find settling the debts more beneficial than a 5 year chapter 13 bankruptcy repayment.
Assume for a moment that you could settle with USAA for half of all that you owe them (though you can often target better than 50% savings when negotiating USAA credit cards). Also assume your settlements with the other creditors will be what I outline as realistic targets in this article where I rank your remaining credit cards: https://consumerrecoverynetwork.com/review-top-7-credit-card-lenders-best-offering-debt-relief/.
Assuming you can settle all of the debts you are concerned with above for about 30 thousand, how soon would you be able to access that money? Does it all come from the insurance?
Settling with USAA for Less than What You Owe
I am with your CPA and the last attorney you spoke with. Negotiating a lower lump sum pay off amount with creditors like USAA, and the other banks you have, is not rocket science. But there is a science to timing and funding your settlements in the first, second, and later stage collections.
You are in your third month of non payment. I highly recommend trying to knock as many of your settlements down as possible withing the first 12 months, and I often target settlements with some of your banks earlier than 6 months late. You can prioritize the creditors to settle with first, second, third, based on when funds are available. But if you are able to raise the 30k you will need quickly, it can bee good to prevent additional collections from showing on your credit reports.
It is okay if you cannot get to settling with them all that quickly, but I like to see people achieve early settlements when ever possible, in order to avoid the A.S.S. principle I outline here: https://consumerrecoverynetwork.com/credit-cards-debt-settlement-why-banks-do-it/.
If you want to get a good grip on what you can be doing now to set yourself up for success with later creditor negotiations, read through the first stage collections and settlement guide starting here. Click through to the next article in the series at the bottom of each page. By the time you read through the 7 or so sections, you will be well equipped to make your first set of calls to USAA and your other credit cards.
After you read through the debt settlement sections on this site, and get all of your questions answered along the way, you should feel a high level of confidence that you can negotiate your debts. I do help people resolve USAA balances, but do suggest we talk about your particulars as early in the process as possible in the even I recommend against including them in your negotiations. You can reach me at 800-939-8357, choose option 2. You can also submit a consult form for me to call you (see tab at top of page).
I do not think you will need the full 50k to fund all settlements… unless the USAA accounts are not very seasoned (newly opened), or you look highly collectable on paper. And right now, with two and three months of missed payments showing on your credit reports, you look like someone in crisis, which is going to be helpful.
Anyone with questions or concerns about negotiating settlements and payments with USAA is welcome to post in the comments below for feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
I often see 40% settlements with USAA spread out over 12 months. This would update any credit reporting to show the account is resolved (after the 12th payment).
You can often get this outcome yourself, or you can work with someone here in the network to negotiate the deal and get it documented for you. The fee for that is 15% of whatever you save in the settlement.
Hello, I do not know if you still reply to these comments. I was just wondering about resolving some debt, 55% of which is spread across 3 usaa credit cards. Let me know if you’re still replying to this and I will post more details about the situation and amounts. Thank you
I am still responding. There are times where there are gaps in the replies, but I am generally a few days away from posting replies to questions about accounts with USAA.
I have a charged off credit card with USAA from 2011 in the amount of $4900. I have received several offers through the years to settle, though none since 2014. I would like to settle the debt in order to resume access to USAA services. Is this possible or does one have to pay close to the entire amount charged off in order to resume a relationship with USAA? This is my only charged off card on my account, all others are positive. Also, as the debt is due to fall off in less than 12 months, I want to make sure that by settling the debt it does not reset the clock on falling off of my report. Please advise and many thanks.
Paying an old collection does not reset USAA on your credit reports. SO no worries there.
Call USAA and ask about their policies for offering their products to past account holders that struggled to repay USAA. Many banks maintain a list of defaulted account holders who they will not provide credit to again. Last I knew, USAA was not one of them.
My ex husband and I have/had a car loan with USAA that was opened in 2007. He filed bankruptcy after we divorced and I am currently left with a charge off from 2012. I believe the balance is about $3,800. I am trying to use the car as a trade in but unfortunately cannot since it does say there is still a lien on the car. The car is only worth about $500 nowadays. How likely is it that USAA will work with me on releasing the title? I don’t have the money to pay off the balance.
They are highly likely to accept a settlement to release. I am skeptical whether they will go as low as it is worth though.
Good morning Mike,
I had a question about a debt I have with USAA. My ex husband and I had a truck together and when we separated he took the truck and no matter what I did he would not pay the payments. I couldn’t either because I had my own car payment. I was on the phone with USAA everyday trying to get this resolved. He wouldn’t answer anyone’s phone calls. In our divorce papers it states he has full responsibility for the truck and unfortunately that couldn’t help either. I tried everything legal I could but in the end I helped USAA repo the truck. It was auction off, but we still owed quite a bit left. I talk to an attorney and he has worked both sides of this case. He said my best option was to do a settlement amount with them and they CAN take it off your credit. I am doing this and making monthly payments for a year. My question is do you think USAA will take it off? If not I don’t see the point of paying anything if it will stay on my credit anyways.
Thank you
Bri
USAA typically does not do pay for delete. USAA will update your credit report to show the balance owed is zero. That will improve your credit situation going forward, so there is a reason to pay.
Anyway you can pull money together to pay the settlement quicker? That will speed up the credit recovery.
But I will still have the repo on my credit for seven years? How much does the repo ATUALLY effect?
I’ve been thinking about putting a thousand down to help lower payments. I pay 250 a month for a grand total of 3,000.
Thank you
An unpaid repo will have a larger impact on your credit reports than a paid one. It will prevent any home loans, and often other credit too.
You could probably settle the whole balance for 40% if done correctly. The impact to your credit will be the same… a zero balance paid collection.
USAA my estranged wife took out credit card in my name. Ran it up to the limit. I never new that she would do this. USAA states due to it has been over 90 days and other notes the account is legally mines and all debt as well. I am separated from my wife pending divorce. She used all my info to get a card in my name and hers what can I do
Are you willing to go through with filing a police report?
Mike,
I have 14k of debt with USAA and Navy Fed, with a few smaller debts. Its been past 90 days and I have no intention on welching, its just Im in college now and my children come first. The debts are just unreasonable to try to pay now. Navy Fed has my mortatage. It will be 2 1/2 years before I can really chip away at the debt again. Is there an option I can do for 2 1/2 years and not have a default status?
Check out this article about the 6 main options when struggling with credit card debt. If you are not able to make the minimum payments to USAA and Navy Fed, and if chapter 7 bankruptcy is not a good option, you may be looking at saving up to settle with them (the earlier the better).
I am currently working with a debt relief program. Can USAA repossess a vehicle to satisfy a credit card debt? The vehicle is financed through USAA, and has only 6 months left on the loan. This loan is current. The credit card is overdue by one month. The debt relief program told me they couldn’t do that, but I’d like your opinion.
There have been some problems getting title released on the car loan if your credit card has not been settled.
How much is your USAA credit card balance?
$11,000
Will you have 4500 or so available to settle with USAA in a 5 more months?
What are your other accounts and balances?
Are you 30 days late on all?
I am 74 years old and only have my SSI income. Alimony payments are past due from April 15, 2016 through November 2016 and might continue if I don’t do something about it, which I plan to.
I will have to file for Chapter 7 bankruptcy due to loss of income, alimony.
Before this happened I was with a debt relief consulting firm that I paid and with that money they were paying my debts but had to cancel that program due to loss of income.
What the cost of Chapter 7 bankruptcy and is there a senior discount.
There really is no senior discount from the courts. Attorneys charge differently. You could be looking at $1,500 in costs. Talk about your situation with a bankruptcy attorney in your county. If chapter 7 is an option that could be all the costs. If chapter 13 is the only option, find out more about settling your credit cards for less as an alternative.
Is the bulk of your credit card debt with USAA? How much do you owe total on your cards?
What credit counseling agency were you with? When did you stop sending them your monthly payment?
I defaulted on USAA Credit Card with a 14K balance owed about a year ago. Several months ago United Recovery Solutions started trying to collect. I requested DV and they sent it. They called a few more times and I told them I filed for chapter 7, I did not file and I did not hear any more from them. Recently I got a call and then a letter from Mercantile Adjust, they are trying to collect the USAA account. USAA is still reporting a balance on my reports. So could URS have sent it back to USAA and now USAA assigned it to MAB?
That is precisely what happened. Do you have a goal to resolve the debt?
Aside from waiting them out to the SOL (5 more years in michigan) I have been hoping it will just go away. I think they were quiet until Capital One reported two cards as settled for less than full Balance. Now USAA and another account have gotten the notion I might be collectable. I sent MAB a DV request to get a feel for what they plan to do.
Mercantile Adjustment Bureau is just a contingency debt collector. They do not plan to do anything other than try to get you to pay via phone calls and letters. If you are motivated to resolve the debt they can help facilitate that. If you are looking to avoid paying than there is nothing to do with Mercantile Adjustment. Their time limit to try to collect from you that USAA gave them will expire and USAA will drop your account back into the collection pipeline.
If my USAA accounts are settled or enrolled in a debt management program but my wife’s are not and she is the primary member, will USAA allow us to continue to get insurance through them.
Are your USAA accounts totally separate from her? She is not a cosigner?
List all of the accounts you have with USAA, and who is on each.
I have two USAA credit cards, and she has one,. All in our own names. We have a small loan out together I would not put into a DMP because it is almost paid off.
Hello,
After a 1099-c has been submitted to the IRS, can the CC company still report the debt to the credit bureaus? If so, does the balance stay at what was owed or does it change to zero? Thanks in advance!
V/r,
Maggie
Negative items like unpaid credit cards stay on your credit reports for up to 7 and one half years. Virtually all banks that send a 1099c after forgiving all, or a portion of your debt, are going to continue the credit reporting until that full amount of time has expired.
I have seen balances show still, and also a zero balance.
Tell me more about your particular situation.
Had trouble getting a VA loan all the way through because many of the homes in our budget in the area needed repairs. After our favorite slipped away because of $500 in carpet replacement that the seller was going to include as a $1500 concession, we started looking at land to just build as we go. Unfortunately, the cheap land we found ended up requiring a LOT of work because there was a 20-30′ drop off from the road that wasn’t obvious until after the cedar brush was cleared out. Technically, we own our home free and clear…but this is only because we used credit cards to fund it. I tried to get a home equity loan with RBFCU to consolidate the debt and knock down the APR, but they said that we would have to wait at least a year of residence (AKA next March).
Right now, I’ve been juggling payments and due dates to keep us just barely afloat, waiting until next June…but after reading many, many articles on your site, I’m stopping payments on the cards to start working towards getting settlement offers instead. However, I am not sure if I should also stop the USAA personal loan and credit card that my husband and I have. It is a payment of ~483 a month and ~225 respectively. If we stopped paying that for a few months, we could get the other big monthly payment (Upstart) of $450 paid off by the end of November and then pick it back up again, but I’m worried about possible ramifications from USAA since we have our checking accounts, home insurance and car insurance with them. We could move our direct deposits over to RBFCU (who we tried to get the home equity loan with and now have a checking account with because of this), but we really don’t want to change our home or auto insurance. If we skip payments for Jul-Nov or even Dec, what are we looking at happening?
What are the balances owed on the USAA accounts? What are those interest rates?
In fact, it would help me offer thorough feedback if I knew the balances and creditors on all of your accounts.
If you do settle with USAA you may still be able to keep your accounts open, and the insurances. You may see your premiums increase if they do keep those in place for you.
I don’t really understand if it’s possible to rebuild relationships with them in the future if we do go the settlement or bankruptcy route; but if that’s something that we need to keep in mind, I’d like to be able to continue to use USAA, PayPal and either Discover or Upstart.
Credit Cards:
Discover – 6959.36 – 19.24%
AMEX – 4998.05 – 0% through 08/22/2016, then 17.24%
USAA Platinum – 9103.68 – 18.15%
Chase – 3991.52 – 19.24%
Chase Amazon – 1975.00 – 22.49%
Bank of America – 429.65 – 0% through 06/07/2017
Barclay – 1713.87 – 25.24%
Home Depot – 225.00 – 0% for now
Synchrony – 2436 – 0% through 01/25/2017
Personal Loans:
Upstart – 5052.13 – 25.23% – 450.68 per month (ends approx 06/2016 naturally)
USAA – 21736.80 – 11.49% – 482.39 per month (~60 payments remaining, I think)
THD – 7549.60 – 7.99% – 117.44 per month
Credit Line:
Paypal – 1461.59 – 0% through 09/19/2016
Community Finance – 2000~ – $126 a month; the sooner this one is paid the better because the APR was rough (no septic, so they financed a composting toilet that meets building codes in our area)
Student Loans:
MyFedLoan Servicing – ~19000 – 6.5% – 133
Great Lakes – ~11000 – ??% – 102
It is a hard decision to keep some accounts open over others. If you are using the monthly amount that would go to pay your USAA credit cards, and payign down other debts, it means taking longer to settle with them. This means you will be negotiating with an outside collection agency that USAA uses.
When it comes time to negotiate the settlements on the USAA accounts, your being current with that many creditors may cause the settlements to be not as good. This is not always the case, but I want you to be aware of it.
If you have not already talked things over with a nonprofit counseling agency to see what you monthly payments can be lowered to when consolidating (not a loan), I would encourage you do that. It is a free call at 800-939-8357, press option 1 when you hear me start talking. You will go through a budget expense exercise on the phone. The whole point of this is to get an exact to the penny quote of what your monthly payments can be lowered to on all of those cards and loans. If the payment is low enough for you to manage, it will give you something to compare to settling.
If you cannot do the nonprofit consolidation, and are going to proceed with settling those USAA accounts, call me at that same number, but press option 2. I can share some important time lines with you that can help you succeed.
I have a credit card collection with American Coradius International. It is from a credit card with USAA. I called and set up a settlement offer for 1700.00 the original debt was 2500.00. I called USAA before and they told me this was the correct company so I feel ok with sending a money order however ACI told me they will send a settlement letter to me after the payment has cleared. They said I would receive an email with the terms either tonight or tomorrow. I have until the 27th to get them the payment but they are in NY and I am in Ca. Is there anything you can tell me about this company. Also what can I do if I do not get a settlement email?I know I can record the conversation but I don’t think that is legal in California even if they know I am recording.
Thank you
You can record the call with ACI. Just tell them you are recording and why (they would not send a letter prior). You would have their consent at that point, and debt collectors do not hang up when you are trying to get them paid.
Why is it you are worried about them being in NY and you in California as it would relate to making the payment?
I called USAA to settle my delinquent credit card with them and they offered me 60% of the balance and I would have to wait 6 months for another offer. is this true?
How late were you with making any payments when you made that call and got the offer from USAA?
its been awhile so I think back in 2013 or 2014
Give me a call to go over your situation Tom. It is a bit out of the ordinary, but I may be able to pinpoint a reason.
You can reach me at 800-939-8357, option 2. You can also email me through the talk to Michael feature in the right sidebar of the sight.
hi,
i have a usaa amex that was opened in 5/2008 and been delinquent since 2013. the balance is about $8100. i don’t get any letters from collection agencies on this account so i haven’t reeived any offers. can i just call them and offer a settlement of 2000?
diana
You can call and offer USAA a settlement. My experience is that you will not be approved for that low of an offer. What are your hardships that cause you to stop paying? What hardships exist today?
i had stage 2 uterine cancer and was unable to work due to being ill and under going treatments. the cost of meds and medical bills came first so that’s where most of my money was going at the time. im better now and trying to pay debts i was unable to back then this being one of them. what is the lowest settlement i should offer?
My family and I are currently in $50,000 of unsecured debt and we are not currently able to stay caught up on the credit card payments. $10,000 of the credit card debt is with USAA. My wife and I have our home insurance and auto insurance policies plus a couple IRA’s through USAA. We are about to go through a debt relief company to have them settle our unsecured debt.
Since I will not be making payments to my USAA credit card while the debt relief company is negotiating a payback amount will USAA close my insurance policies during this process? Will they pull from my IRA’s? Do I need to move my IRA’s and insurance policies to someone else? Thank you for your help.
I am a huge fan of going at credit card settlements in as prepared a manner as possible. If you have time to change accounts, and even move IRA funds without penalty, I often recommend it.
When did you last make any payments on your USAA credit cards?
My ex husband died owing USAA credit card(s) My daughter was just awarded executor of his affairs. The amount that they are asking is more than he has in his estate and there is no equity in the house because the home is only 16 months into the mortgage. I believe she said she ran across a settlement option but it may have expired prior to his death. Is she still liable for his debts ?
Your daughter, if not a co-borrower, is not liable for his USSA debt, but his estate may be, regardless of whether the full balance can be paid back.
I can dig deeper into this situation, and some options to consider, on the phone. You or your daughter can call me at 800-939-8357, I am at ext. 2.
I was so happy to find this thread that specifically pertains to dealing with USAA. My husband and I each have credits cards through USAA, $15,000 each, and one AMEX credit card with a balance of $18,000. Prior to 2012, we have always paid our credit cards in full and on time every month…then we had kids and my husband was no longer in the AF Reserves. We also have a HELOC with USAA in the amount of $31,000. With our loss of income and rising daycare costs, we have not been able to catch up. We decided to file for Chapter 7 and just had our 341 hearing which went smoothly. We expect a discharge in early February. With Chapter 7, we are not able to include our HELOC. Our house is valued at $159,ooo (based on USAA’s evaluation). We owe $141,000; but received Hardest Hit Funds of $50,000 (reduced from $191,000 to $141,00), which does not mature until 5 years from now. Per the HHF, if we were to sell prior to the maturity date, we are obligated to pay the money back. We plan to call USAA about seeing if they will settle the amount with us for the HELOC and release the lien on the property, but would love your advice on how to handle this. We have our Homeowner’s Insurance, Auto Insurance, checking and savings accounts, Roth IRAs, Life Insurance and one auto loan (which we reaffirmed), through USAA. To say the least, we have all our eggs in one basket with them. We love USAA and hope to maintain a relationship with them. So far they have not cancelled any of our policies. Any advice would be much appreciated!
Give me a call to go over your goals and abilities when settling your USAA HELOC. You can reach me at 800-939-8357, press option 2.
Are you for sure selling?
Good Morning Michael,
We do not have any plans to move in the near future and don’t have intentions of selling the home. In fact, we plan to keep the home as a rental property if we were to move out of the city in the future for another job opportunity (we’re both looking for better paying jobs). We received a reaffirmation agreement from Wells Fargo for the primary mortgage and have not received anything from USAA regarding the HELOC.
I have been struggling to keep car payments. I have been staying under the 70 day review for repo. I called yesterday to make payment and I didn’t realize it is now 74 days past and has been sent to the repo department. I have to call them today. Will they allow me to make payment arrangements to keep from repo through USAA?
You may need to come up with enough to bring the loan current. Can you come up with the money you need to do that?
Call them and find out what your options are. They will tell you.
I have 12k on a USAA card with 17,9% interest. With that interest and minimum payments I am struggling. I am going to start falling behind. I pay $337 a month for my car (10k left) and have $2300 0% interest and the USAA is killing me. Suggestions?? Help?? The interest is KILLING me. Should I try to settle or lower interest??
I would first look at whether you could afford to pay something like $204 a month with confidence moving forward. Is that something you think you can do?
If that lower monthly payment is not doable, or your income is not consistent, looking at coming up with the money to settle would be the next step. Call me for a quick consult if you like at 800-939-8357, option 2 rings to me.
Hi Michael,
I’ve used your strategy in settling my other debt to great success and for that I thank you. Thank you for giving me courage. I am on my last 2 card and now Im’ nervous.
I owe $9,950 and $8100 on 2 USAA credit cards. After pregnancy and moving states, I couldn’t work and haven’t paid directly to USAA since 9/2013. In 5/2014 my cards were discharged to RGS Financial and United Recovery.
I’ve made small monthly payments($25 each) to both companies since then.
I have 2 USAA checking accounts, individual (inactive as of 1/2014) and joint ( occasional) with USAA. The rest of the products are in my husband’s name alone.
I’ve recently landed a short term (6 mos) job that will allow me to earn enough to start debt settlement negotiations. This is one of the very few threads I’ve found that deals with settling with USAA and its collectors.
How receptable is USAA to negotiating? Am I negotiating with USAA or the agencies at this point? Is $2500 a card a good offer for me to give them? Should i settle one card at a time as funds become available or wait till I’ve got enough to settle both at the same time?
Thank you
Call me for a consult about settling your USAA accounts Toni. You can reach me at 800-939-8357, choose option 2.
I have questions about your husbands accounts with them, and also about your payments to RGS and United Recovery Systems.
It was nice to talk with you today Toni. I look forward to hearing from you in a few weeks in order to help you negotiate your first settlement with USAA.
Hi Michael!
It has been a rather busy few weeks but I have great news to share. My debts to USAA are paid off.
After talking with you I was finally able to get in touch with United Recovery. I offered them $2500 to settle my $8xxx credit card debt, and they rebutted with $4500. I passed that offer. After that phone call I called RGS, who owned my $10,xxx cc debt. I offered them the same $2500 to settle my $10k debt and they accepted. I paid the sum and received the “proof of payment, settled as agreed” letter.
Two weeks later, I again called United Recovery. I offered them $3000 to settle $8xxx and they again countered with $4500. I explained to them that I was able to settle a larger debt for a lower settlement with another company. I asked that they consider the small payments(total $3xx) I had made for the previous 14 months. After being put on hold several times they offered to settle my debt for $32xx. I agreed, and again after payment I received the “settled as agreed” letter.
Two weeks after that, USAA notified me that I was once again eligible to use all products and services.
I want to say thank you for all that you and your team does. Without finding this group and thread it would have been very difficult to find answers about USAA.
Good luck to everyone else out there, it can be done.
Hello-
I had a credit card with USAA, was sent to S. Korea where my wife was not able to work and I was not able to make the monthly min payment requirement; however, I paid $75-$100 monthly. The account was cancelled and charged off and I continue to make payments in efforts to satisfy the debt. I am now back in the states and prepared to pay the account off ($10K). Have you seen any cases where USAA was willing to delete the charge off and replace it with paid? The account was opened in 2009.
USAA will not accept payment in return for deleting their charge off, or removing the charge off so that the account appears like it was never late. You could not offer them double the amount you owe to get them to do that.
If would like help resolving your account with USAA for less, or determining the best approach relative to the outcome you are looking for, you can call me to discuss at 800-939-8357, choose option 2.
What are my chances of settling a personal loan with USAA? The loan was approved December 2014 for credit card debt consolidation. My last payment was 3 months ago because of financial hardship, but I have kept in contact with USAA to let them know I’m trying.
Settling USAA loans and credit cards are common enough. The challenge for you, if there is one, will be the recency and amount of the loan.
Give me a call to discuss this in detail. I will want to get some answers to questions that will allow me to offer better feedback and negotiation targets. You can reach me at 800-939-8357, choose option 2, or fill in this consult request: https://consumerrecoverynetwork.com/free-debt-consultation/
This is some great information on USAA – very helpful so far, thanks.
I had a USAA credit card that I last made a payment on back in 11/2009 and it was charged off for $24k. CBCS had attempted to collect and had offered settlements from 40-50% back in 2013, but I haven’t heard from them in a very long time. The SOL is approximately 10/2016, but I’m finally in a place where I can get this account settled and hopefully to a balance of $0 in the next few weeks and help my credit score as my utilization has been poor, in large part because of this account.
I’ve logged into the CBCS website, but no longer see this account. USAA continues to report this account monthly to EQ and EX (not TU for some reason) – so should I be contacting them directly to attempt to settle? And if so, what should my target settlement rate be?
Thanks in advance!
You can contact USAA directly and find out the name and contact details for the debt collector they have the account with. If they do not have it placed for third party collection, you may be able to negotiate the lower lump sum pay off directly with USAA.
What to target with settlements can be a moving target. Generally speaking I would try to hit nothing more than 40 percent. But you can sometimes settle for better results when you do not appear all that collectible, and are able to communicate the situation well. Other times, you may have to settle for higher amounts because of how collectable you may be viewed (credit reports are the main source for how you are scored on a collection scale), who is collecting, and how well you communicate.
Is this the only unresolved account on your credit reports? If not, how many are there? How many current and positive accounts are there?
Michael, I would like some advice as you seem very knowledgeable. I have a USAA credit card account I opened October 2010 with a balance of $9489. The account reads in the following manner on my credit report: Date opened – OCT 2010, Status Date – Feb 2015, Condition – Open, Last activity – March 2013, Balance – $9489, Status – Charge-off. My questions are this. I can not afford to pay USAA $9849, should I offer a settlement for 30 cents on the dollar, should I then have the account “closed”, what status is reasonable to negotiate for on the account with a settlement? I am trying to get a home loan within the next 12-18 months and this is the account that is really hurting me. Thanks so much!
Do you have that 30 percent available right now?
Your goal will be to settle so that the account is updated to show resolved with a zero balance. Getting USAA to update your credit report is a byproduct of the settlement you will negotiate. There is not much additional you would need to negotiate with them about as far as credit reporting goes.
Are there other collections on your credit reports?
What are your credit scores today?
Michael thanks for the reply. I do have the 30% available, even 50% need be if that would get them to play ball. There are 3 collections currently on my cr, 2 of which are medical bills under 40 dollars I’m currently getting off of my report, the other a small utility bill that will be off soon as well. My scores are EQ 569, TU 552, EX 602. What should I ask for when attempting to settle and what common mistakes should I avoid? Thanks so much!
I would want to negotiate a settlement with USAA, or the debt collector handling the file for them, while there are still collections showing on your credit reports (even if small balances).
Follow the tips and suggestions on the following pages about negotiating accounts in collections, and what to look for in your settlement letter.
Hi. I have been negotiating with USAA. Still haven’t agreed on settlement amount yet. I’m having a hard time with Navy Federal Credit Union. What are the chances NFCU will settle? 2 Accounts almost 150 days late.
Your chances for settling with Navy Federal are good. Read over that NFCU page, and post any comments, questions or concerns you have over there. If there was any unusual account behavior (cash advances, large purchases) prior to payments becoming unaffordable, post the basics about that.
I’m. 62, receive pension of $2100 and social security of $100. Student loans have garnished 25% of my pension.My car just got reprosess,lost my job. Stay in Virginia with rent of $1270. Owe others loans trying to survive, what should I do?
Have you spoken with a bankruptcy attorney about filing chapter 7? It could help to stop the garnishment and give you an opportunity to bring your student loans out of default, or potentially even discharge them (though this is difficult to do).
Thanks very much for all of the information. I have been busy reading it. Our top three creditors are USAA ($21.7k), Capital One ($20k), Citi ($12k), Chase ($12.7k), Amex ($5k), and BofA ($9.7k). The Captial One card is in my wife’s name, so she has to be on phone calls. I do have money($30k) from life insurance whole life loans that I can use to pay this off (or down) quickly, but I need to use some of this for upcoming medical bills, and college tuition. I can cash in another $25k, if I have to.I did explore Debt Management programs initially, but did not have enough income to make the payments required. I understand from the last attorney I spoke with that this money would not survive in a Chapter 7, and he suggested the debt settlement route. He also warned that many DM companies are not very good and the fact they are non profit just means they spend all their funds annually. We have not used the cards for any purchases since May, and have not had any purchases over $200 since February.
We do have about $75k in parent plus loans, and our second daughter needs to borrow about $40k more to finish school. I doubt we will qualify for new parent plus loans. We are current. I am at a loss what I can do to help her. Our older daughter does not have a good job yet and has not paid us for the loans, as planned.
The original three BK attorneys I had consulted who had suggested chapter 7, did tell me to stop paying cards in June. I have been getting lots of calls, and need to deal with this now that I have a chance to pay back some, and now that I have your very helpful information.
The last, more experienced, attorney I spoke with said that I should insist on a letter saying debt is settled in full before I make a payment, and also a written statement that they will remove negative reports. He says they often fight this, but that it is possible. Have you had luck with getting them to remove 90 day late notices and negotiating reduced balances? I wish I had spoken to the last attorney first, and also found your website earlier. The advice from the other attorneys has really messed up my credit. I hope there is light at the end of the tunnel.
There is light at the end of the tunnel with this kind of stuff. Your tunnel, at least for the credit card debts, is short given the money you have to work with.
What state are you in?
Do you have other accounts with USAA credit union other than the one mentioned?
Do you currently make mortgage and/or car payments?
Is your daughter applying for loans on her own as well?
Is your current monthly income stable (same amount roughly, and no worries about job change)?
Answer those questions and I will have some more drilled down feedback to offer in reply.
FYI – Non profit debt management companies (credit counseling agencies) do not spend all revenue received each year. Far from it. You can pull their 990’s (with a two year delay usually) and see that they hold sometimes many millions in reserve year over year.
We live in California. We have been making regular car and mortgage payments. Our mortgage was modified under HAMP about 3 years ago. Our younger daughter is on a car loan with me and is making all payments herself. She works nearly full time and has a 3.8 GPA in first 2 years of college. She is also applying for Stafford Loans herself, and applying for numerous scholarships. My income is stable and job is also stable. Unfortunately, when company was sold in 2008, I took a pay cut of 40% as all overtime went away and were were put on a lower base salary. Our daughters were both in at fault accidents, so car insurance is quite high. Also, we do have some serious medical issues that have been ongoing, and medical insurance deductible for the family is $12k under the new employer’s insurance. Monthly medical premiums are $1430. The only other USAA account is a $50 checking account.
It is interesting about non profits and 990s. The attorney’s caution was that not all debt management companies are created equal, and that some take advantage of being “non profit” and aren’t necessarily motivated by the best interests of those seeking their help.
You are going to be in good shape to settle the credit cards for close to the 30k on hand. I cover general settlement targets for all of your creditors (other than USAA) in this post: Ranking the top 7 banks for credit card settlements.
I also have pages dedicated to each one of your creditors, like this one we are on is focused on USAA. Use the search box up top, read through those articles, and especially the comment sections of each. Post any questions and concerns you have along the way.
Be sure and read through the last several critical reports about debt settlement that I have listed here: https://consumerrecoverynetwork.com/debt-relief-program-reports/. The information about debt settlement and taxes will be something you want to prepare for. Based on your delinquency level right now, you could have all of this hit this coming tax season, unless you take some of your creditors up on their 90 day payment options on the settlement amounts you agree to. That last payment would then likely be in 2015, so tax implications on forgiven debt will not hit until 2016.
USAA does have cross colleteralization clauses from product to product, so no other accounts than the checking is a good thing. It is also a good idea to not have active checking accounts at banks you have credit cards you are going to settle. I cover that in the critical report about how to save and pay your settlements.
The attorney caution was not wrong if talking about debt settlement companies. And not really wrong talking about nonprofit debt management companies if the view he/she had was from 10 plus years ago. Much has changed since then in the credit counseling industry.
Does my credit get dinged any less if I pay the $30k of the bills that are already 90 days late, and then do a debt management plan to pay the other $30k over 3 years? My main concern is being able to help my daughter with parent plus student loans. It appears they are approved not by credit score but by debt to income ratio and any derogatory late payment reports. If my credit is messed up equally either way, I’d prefer the settlement route and then give my daughter some of the money for school instead of paying the bank.
That is another creative approach to using the cash on hand, along with income, to reach your goals. And if your monthly income is stable, I think you would be successful.
Call 800-939-8357, and press option 4. Ask for a counselor in their student loan project. Go over your entire scenario, your goals, and your monthly cash flow. See what your repayment to creditors will look like after you pay down debts with the 30k. Project what your payments on the plus loans will be along side this plan.
You will preserve some of your credit by acting now, and by working with a company like MMI to reage the debts, and bounce back from the late pays.
I like both approaches really. The debt settlement plan is the rip the band-aid off approach, while paying down the debt gets you to the same place, but at a measured pace.
If you have concerns about income stability over the next couple of years, settling these debts makes more sense.
After doing this, and checking goals and actual current debt we discovered the total due for credit cards is actually $93k. I am already about $600 short each month without the credit cards. With a DMP, I would have to come up with about $2100 more. So, DMP won’t work. If I can settle for half, I can get this from insurance money fairly quickly. Credit cards are now nearing 90 to 120 days due. Is it possible to settle with credit card companies directly now, or do I have a better chance if they are with collections? I am concerned about being sued or having wages garnished and possibly having them try to take my house. I would be protected from this in Ch 7, but would certainly lose my insurance and possibly other assets. But, I could still have a new start. Possibility of helping daughter with loans for last 2 year of college do not seem great under either scenario. I believe my present income should be stable for the next 5 years at least. I am already over 60. I do have some retirement funds, and I am trying to wait to use them until I am 70.
Settling appears to be the right direction to take. But do not attempt any just yet. Have you read through the first section of the debt relief guides about first stage settlements? Start here: https://consumerrecoverynetwork.com/settling-credit-card-debt-is-a-race/ and click through to the next article in the series at the bottom of each piece. Based on the info shared so far, you will be through this in the next few months. I do not see much risk of being sued if all of this is managed correctly.
You would likely benefit from some one on one coaching through all of this. Call 800-939-8357 and talk to a specialist in more detail.
Thanks for all your helpful insights! Much appreciated! I will put all the information given into consideration! One more question, on my recent opened accounts using them for balance transfers, how hard would they be to negotiate? Just curious.
Negotiating an account that is only a couple of months new, and where the balance is not made up of purchases, can be impossible with some banks. You will know what you are up against when negotiating with USAA shortly.
That is what I was afraid of. I have 4 total accounts (USAA, US Bank, Capital One and Financial Plus Credit Union) between 2-4 months old. Balance transfers mainly. I believe all of them will make it tough. Navy Fed accounts are 6 months to 3 years. I’m thinking I might be ok to settle with them. Overall I believe I’ll need to contact a Bankruptcy attorney and see what their thoughts are since I’m 2 years away from Chapter 7.
I was also curious if a USAA American Express credit card the same as an American Express card or is it considered a USAA credit card?
The USAA American Express credit card gets processed on the AMEX payment platform, but would typically be connected to USAA collection policies right now.
I also have 2 credit cards with Navy Federal for 3 years and a personal loan with them. What are my chances of settling my accounts?
I can help you get a better understanding on the other accounts (USAA and US Bank), when you post answers to those questions above.
Generally speaking, Navy Federal does settle credit cards and personal loans, so I would say your chances are pretty good. Do you have any other accounts with any of these banks (auto loan, mortgage, insurance)?
How late on payments are you with any of these banks?
No I don’t have mortgage or auto loans with any of the banks. My brother signed a vehicle for me so I am paying the note through him which is $300 a month. I only have life insurance with USAA. Small balances checking and savings with USAA and Navy Federal. Are you knowledgeable about Financial Plus Credit Union in Des Moines, Iowa? I’m nervous about my credit card with them too. This will be the first month I will be late with all creditors. I did post answers on USAA and US Bank on my previous post. Thank you for your responses!
Have you talked with a bankruptcy attorney about the benefits of chapter 7? I would want you to do that first before exploring anything else with any of these accounts.
Given the size of the debts, and a diminished income, chapter 7 bankruptcy would provide the most comprehensive relief, for the least cost, and you would not have to feel the pressure of collection calls and risks while already feeling pressures from a reduced income, single parenting, caring for your mother, and your own health concerns.
Post what your perspective of bankruptcy if you have already talked with an attorney, or post what your thoughts after connecting with one as soon as you can. You can locate an attorney local to you through the phone book, or online listings, and also through http://www.nacba.org.
I have thought about Chapter 7 but would have to wait. I had a previous Chapter 7 in April 2008. The economy going down hill and I was going through battles with EX husband over CS and kids. The court costs were expensive and I got laid off of work with no warning. I was a single mom living in Southern California and I had no family and expensive daycare and racked up a lot of debt. I would have to wait til 2016 to file Chapter 7. Will I be able to hold off creditors for 2 years? I don’t have any assets and a car that’s in my brother’s name. That is why I was trying to negotiate settlements with the creditors. I am no longer using the cards. What are my best options with this scenario? I don’t want to do Chapter 13. I heard that’s worse.
It is completely possible to keep creditors and collectors at bay while you wait out the time to file chapter 7. If judgments are entered in court, you may have to handle your finances a little differently until you file, but those changes are simple to implement.
I can help you navigate each thing that comes up as you post about it here, or on other pages of the site.
Hi I am going through some financial difficulties and would like to know what my chances are to settle new open accounts with USAA and US Bank credit cards?
Thanks!
When were the accounts opened?
What are the balances?
What is the gist of your hardship?
USAA $5500 (USAA American Express) and $6500 (USAA Rate Advantage) and US Bank $2000 credit cards were open in June 2014. They were mainly used to do balance transfers with Navy Federal credit cards which I have had for 3 years. Balances on Navy Fed credit cards are 14,800 and 8400. I have a personal loan with Navy Fed for $9500 which is current but its 18% rate is killing me. I also have a credit card with Financial Plus Credit Union for $5600 and Capital One 1100 (current).. My 2 kids and I are living with my brother and he had a small house fire so we lost some stuff and shortly after, he lost his job. I now am having to pay rent and utilities bills to help out. I started recently having medical issues about 2 months ago which is on going and I have not been able to work my full hours. The medical issues are still ongoing. My 78 year old mother is terminal ill and now living with us so I have responsibilities to care for her too. This is the first month I’m unable to make my min payments. What are my options and odds of negotiating with all my creditors? I am saving money so we can live. I want to settle but heading for Chapter 7 Bankruptcy.