Can I settle my credit card debt with Navy Federal Credit Union for half?
I have approx $27,000 in unsecured credit card debt with navy federal credit union. I work in real estate and thus have extreme swings. I also have $45,000 in student loans which I have learned are not able to be settled or discharged in bankrutpcy. My question is can I settle my navy federal debt for 50%? I have read the credit union in general and Navy Federal in particular is very difficult to work with. Please advise?
Can i settle debt with navy federal credit union for 50%?
—Michael
Short answer
Yes. A 50 percent target is realistic with Navy Federal depending on the collection stage you are in, and better results are possible. Navy Federal is one of the easier credit unions to work out a settlement with, but credit union settlements carry complications that a national bank does not have.
Key points on this page
- Credit unions are member owned and usually smaller, so they do not approach settlement with the one policy fits all scenarios used by Chase, Bank of America and Citi.
- Many credit unions do not sell debt to debt buyers, and they lean on attorney debt collectors more than collection agencies. That makes a credit union collector more likely to sue.
- Credit unions cross collateralize their loan products. An on time car loan payment can be used to offset a late credit card payment, and a car title may not be released while the card is unresolved.
- Settlement is typically not an option until the card is close to charge off, which for credit cards usually happens at 180 days of missed payments.
- If your budget supports roughly 2 percent of the balance each month, a lower repayment plan, offered direct or through a credit counseling agency, can avoid settlement and its knock on effects entirely.
- If you hold a car loan, mortgage or insurance product with the same credit union, work out the sequence before you start negotiating, because those contracts can block a settlement.
It is true that settling with a credit union is often not the same, nor sometimes as simple, as setting credit card debt with a national bank. I am not sure what you read about Navy Federal Credit Union, but in my experience NFCU is one of the easier credit unions to work out a settlement with.
Settling Credit Cards with a Credit Union
The basics of why credit card debt settlement with a credit union can be different are:
- Credit Unions are member owned.
- Credit Unions are often smaller banks that do not approach settling debt with one policy fits all scenarios in the way that big banks like Chase, Bank of America, and Citi Bank do.
- Many credit unions do not sell off debt to debt buyers.
- Credit Unions often have established relationships with attorney debt collectors and use their services more than debt collection agencies. In other words – collectors for credit union debts are more likely to sue in order to collect.
- Credit Unions cross collateralize the different credit products they offer their members.
There are some more nuanced differences that can impact your ability to settle with a credit union, but the above list is the overall picture.
Debt Settlement with Navy Federal Credit Union
First lets establish whether you have other options than settling your NFCU credit card. I have some questions you, or anyone else dealing with NFCU, can answer with a reply in the comment section below.
How many months’ payments have you missed with Navy Fed?
Settlements on credit cards are typically not an option until you are closer to the card being charged off. Charge off is an accounting principle that credit unions must follow on unpaid loans. With credit cards the charge off most typically occurs when you reach 180 days of missing payments.
Will your budget support your ability to pay NFCU 2% of today’s credit card balance each month moving forward?
Navy Federal, like nearly all credit unions, will participate in lower monthly debt repayment plans. Some of them offer these plans direct to their members, others will only offer these lower payment options through a credit counseling agency. If your account is not yet charge off, and you can afford roughly $540.00 each month (2% of your 27k NFCU balances), you can avoid settlement and the knock on affects all together.
If your budget supports this lower credit card payment, make a free call to a certified credit counselor with established communication with Navy Federal Credit Union and learn more at 888-317-8770.
Do you have other accounts with Navy Federal?
If you have a car loan, mortgage, or insurance products through your credit union, you can face serious obstacles when trying to settle credit card debt for less than the balance owed. I pointed out in item 5 above that credit unions write contracts that cross collateralize their loan products. This essentially means that you’re on time car loan payment can be used to offset your late credit card payment, or perhaps that the car title is not released when it’s paid off because of unresolved credit card debt. There are many ways your other loan contracts with a credit union can impede your settling credit cards with the same bank. How to navigate these concerns, if they apply to you, and still settle the credit card, is likely handled best one on one, rather than trying to apply your strategy openly online.
If settling the credit card debt with NFCU makes more sense than other payment options, or bankruptcy, your target of 50% is a realistic expectation depending on the collection stage you are in. In fact, we have successfully guided our members to NFCU settlements that result in better than 50% savings. In order to provide more feedback and tips, I have some additional questions:
What state do you live in?
When did you last make a credit card payment to Navy Federal?
If you are being contacted by someone other than Navy Federal for collection, who is collecting?
Can you come up with the money to settle with NFCU today, or do you need time? If you need time, how much?
Anyone with questions about handling credit card debts with Navy Federal, or other credit unions, is welcome to post in the comments below for feedback.
If you would like to cover your situation and options on the phone you can reach me at 800-939-8357, choose option 2, or submit my consult request from and we can schedule a good time to connect on the phone by email.
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.
Michael,
I have finally settled with NFCU assigned attorney. 75 cents on the dollar. Not what I wanted but good enough. He is drafting letter with terms and paid as agreed language. He also said that if I needed and exemption for any reason, he is ok with that. Said money goes to his trust first. I verified with NFCU that he is assigned attorney. Just was curious if I was basically duped into a debt council service, or is this how attorney debt collectors do it? Also, as stated I have another outstanding loan with them that has not yet charged off. Could I expect the same attorney to handle case? Would they be more flexible with repayment percentage?
Thanks,
Vic
I think it is likely that other account lands with the same collector (if you cannot settle before hand). What is the balance of the other account? How long have you had it compared to the one you just settled? Any recent large charges or cash advances on this unresolved account?
I am not sure what you mean in your comment when you say “if I was basically duped into a debt council service”. Can you clarify that?
Michael,
The second loan is unsecured personal also amount of 13k. I’ve had open for about year and half. Into month 5 of non payment. I’m assuming if it gets forwarded to same collection attorney I will be able to work out something with him. My repayment plan for first loan is within 60 days, which I agreed also. So, since I’m putting all I have toward that, I hope he will be reasonable in holding payment on second loan until first one is done….. What I meant by “duped” is that the way collections attorneys hold money in their trust? That is what he said to make checks to.. It just concerned me. Also, is it worth calling navy federal to verify the settlement ?
Thanks
You pretty much already verified the attorney is working with Navy Federal, and that would mean he has the ability to resolve the account with you up to a point that would require approval. 75% settlement would not be an exception to the attorneys guidelines based on my experience. Call if you want, but I would not if it were me in this circumstance.
The attorney trust is part of just about every law practice, so normal.
I do not think you will do much better than 75% settlement on the personal loan, given the account profile you shared. You should still try to get a better deal when negotiation time comes. You have a good shot at the attorney giving some time concessions on the next account you settle, as you will have, by then, shown you are sincere with your commitment to resolve your debts.
Michael,
Hey brother so ive got 34k in unsecrued debt with NFCU. I no longer bank with them and i am struggling to make the min payments, I am still active duty and they keep telling me that they will contact my command if i do not pay. I sold my home and offered them a lump sum of 20k to clear the debt, it sat with management forever, litterly 2.5 months and then was dissaproved. I am current on payments, but not getting anywhere with the debt. i cannot afford to contuine to make the min payments and my creidt is already being trashed so what can i do? I am on there lower payment arragnements already. please help. thanks!
Can you afford roughly 300 a month as a payment to NFCU after using the 20k to pay down the debt to 14k?
If you are not confident you will be able to afford the 300 a month, settling this all in one swoop would be better, as it solves the debt. You will not get anywhere trying to settle unsecured debts when your payments are current. For more on settling with an original creditor prior to account charge off read starting here. Continue reading through the original creditor settlement section by clicking through to the next article at the end of the one you are reading. It will help you understand what you are doing, when, and why.
What if any blow back would you expect from your CO? Is there a history of blow back with him/her on this type of thing? If no bad history, have you thought about being proactive and letting your CO know what is going on?
I have 2 loans with NFCU I am 4 months past due, 1 consolidation loan for 1500, and personal loan for 2500.
I can’t afford the payments being now divorced and having other bills. What type of legal action can they do with me being in the military.
I do not see a great deal of risk of litigation on balances this low with Navy Federal. But the SCRA, at least in some circumstances, would allow you to delay any civil legal action to try to collect from you. See this brochure for a brief description of your rights under the service members civil relief act.
I have an auto loan and credit card for 3k with nfcu. I’ve gone through a divorce recently and am trying to catch up on other loans as well as my 23k auto loan and 3k cc with nfcu. I constantly get behind by 1 or 2 months at a time but never for more than 3. How can I get my payments lowered or interest rates lowered if possible?
What are your interest rates on the auto loan and credit card? If you are paying on other credit cards, what are the approximate balances and interest rates on those?
I have car loan, CC and personal loan with NFCU and I am delinquent on my CC and personal loan payments but on time with car loan. I spoke to them couple of days ago to inform them that I won’t be able to make payments on CC and PL until I finish school (sched. to finish this October 2014) and find a job. They threatened me that they could repo. my car if I don’t pay the CC, which doesn’t make sense to me since I still owe 9k for that car. Do you think they will do that or they are just bluffing me to pay my delinquent account?
They can do that based on how your loans and accounts are set up to be held as cross collateral. They may not be bluffing. I saw a good deal more of this type of thing before the economic downturn (2007 and older), but see much less of credit unions doing this today.
yes the guy who I spoke with told me about cross-collateralization. Please advice me what to do, all I can afford to pay is the car right now and I don’t want it to be repo as Im using everyday. I am 41 days delinquent on personal loan and 30 days delinquent on CC. I still owe $4500 on personal loan and $14k in CC.What is the best way I can keep my car?
Thank you Michael.
Could you budget 314.00 a month if both the credit card and signature loan were consolidated into that low of a monthly payment (until paid off)?
Yes I think I could make that amount. If do that, how long till I paid it off? When is the best time to consolidate those accounts? If I can choose, I prefer to wait till near 180 days in delinquency so I could save some cash just for emergency funding.
As a general rule I would encourage consolidating in this way before you are 30 days late to prevent this blemish from showing on your credit reports. Before 60 days late for the same reason (another late pay). And before 90 days, as some creditors have used this as a timeline to take hardship plans off the table, or make early placements for some accounts out to debt collectors (AMEX and credit unions are good examples).
I used a lower calculation of 1.7 percent of the combined balances on the accounts being your new lower monthly payment. You may/may not qualify for that directly with NFCU, but could perhaps get that plan approved working with a credit counselor. You may need to be prepared to pay 20 to 30 more dollars a month than that too.
These types of repayment plans last about 50 months, but cannot go longer than 5 years. The payment remains fixed the whole time.
Sir:
Currently I owe NFCU almost $24,000 of credit card debt. I have not missed any payments. This month will be my 1st month that I am deciding to stop paying on this account. I contacted Freedom Debt solutions to assist in my dilemma.
Then I researched Freedom Debt solutions and saw that they have many bad reviews on the BBB’s website. Then I talked to my neighbor who is a former NFCU counselor/employee and she stated that I do not mess with that debt solution company and to just try to work it out with NFCU Collections once it gets in their possession.
I contacted Freedom; they let me out of my contract with them – free and clear.
I am lost and really don’t know the right way to go. I have no other creditors other than about $12k in financial aid….I will worry about them later. And I also owe B of A a small balance of only about $1,500.00 for another credit card.
PLEASE tell me what you think that I should do in this situation and what you think is the best route to take.Thank you kindly.
What amount were you set up to put into the settlement savings plan with Freedom Debt Relief?
Michael,
I have received a collection letter from an attorney in my state regarding navy federal credit card. Nothing for the personal loan yet…. It’s the same letter I get from debt collection people. Also says at bottom “this is attempt to collect debt blah blah.” I am going to send validation letter. What else can I do? Is this a good point in the process? Shall I offer settlement for what I have?
Thanks
This is a good point in the process to resolve the account in a manner you can succeed with. When an in state attorney sends you a collection notice your risks of being sued skyrocket, as in, you are now much more likely to be sued for collection, than not.
I am not sure what your purpose is with the debt validation letter?
Michael,
Debt validation was to prove debt is mine, and the attorney is legit. Although, this is standard advice I read online, so I could be misguided. However, I just checked my account and I’m only 117 days past due. I thought they would not take the sue/attorney route until 180 days charge off…… So, shall I NOT send the validation letter? Should I make contact with that attorney in attempt to settle?
Thanks
Debt validation requests are painfully simple for debt collectors to respond to, and they can often trigger the collectors, especially attorneys, to handle the file with a different posture than is necessary when the goal is settling for less. Debt validation letters have a place, but it is much more limited than what you read about on line, at least in my opinion and experience. If you want to be sure the attorney is working for Navy Federal, Just call the credit union and ask.They will tell you.
Yes, if it were me, I would try to open up the dialogue for settlement now.
Attorneys and debt collectors will enter the picture earlier sometimes. Why this happens can vary from one bank to the next. Amex has no real internal collections department, so hearing from a collection agency (including a collection attorney’s office), earlier than most is actually normal with them. Hearing from an in state attorney earlier than normal with NFCU means your account fit a criteria for the referral. Sometimes that could be because your account met some software algo for early placement, or in response to something you sent in or said.
Michael,
Ok, so to open up dialogue for a settlement…… what would be acceptable to start with? Seems like the debt is assigned, so not sure how the attorney is being paid, I.e. percentage of settlement etc. I don’t want to offer too low and trigger lawsuit. How would I go about feeling them out?
Thanks again
You open up about the inability to pay, and any current hardships, expanding on how those hardships and inability to pay are not set to improve any time soon from what you can tell.
One of the things I have coached on for years is to reach out to family in a pinch, to see if you can borrow money to take advantage a really good settlement deal you do not want to let slip by, or when the risks are very real that you will be sued, or have been sued. So with that back drop, you would reference your inability to pay, or agree to payments with things already being too tight (why you stopped paying in the first place), but family can loan you xxxx.xx amount if it will resolve the bill and give you some breathing room. Have the dollar amount be in range with something the creditor/collector can get approved. I have seen, and gotten settlements from NFCU at 30-ish percent, and have seen scenarios like yours settle at 50% and 60%. You are not a client, so I cannot see your credit reports and see what the collector sees, but based on what you have shared, I would realistically be prepared to settle at the middle to higher range of that. Unless your other creditors being current would prevent the better offer approvals, or any at all.
Now, you may not have a situation that fits the above helpful family member scenario I outlined. But you have a scenario, and need to fit all of this into the dialogue you have.
And while settlements can be negotiated in one call, they do not have to be.
Michael,
Spoke to nfcu today, and they said the attorney that sent letter is legit and that I will have to deal with him. So, just wanted to know how these collection attorneys usually get paid so I can work a settlement. Is it based on what they collect or they have a limit? Or is it that they have to go back to nfcu every time an offer is made for approval? I plan on sending letter, or is phone call better?
Thank you
It will not be much different than any other collector relationship. It is better to negotiate with a phone call in my experience. I cannot know this with certainty, but the attorney for NFCU will likely have the authority to settle at a limit to what the debt can be reduced by (as that is often the case). If your situation involves major ongoing hardships, and the reduction you need is beyond any limit that may be set, they can try to get that approved.
You may be tempted to hold out for a great settlement, but now that an instate attorney is involved, your risks of being sued are higher than ever, so keep that in mind.
Freedom Debt Relief was going to charge me an extra 5 grand on top of 16000 which brought it to almost 22000 but once I looked at the paperwork it look like it was going to be about 25,000 altogether… see I really am not sure so I am taking a gamble but I just cancelled that freedom relief contract and im still waiting to see and weigh my options. I am totally lost and not sure of what to do: but since this is the only my first months in 15 years of not missing a payment I’m not going to sweat it and just see what happens
Saxxx – What are the reasons, or current financial conditions, that led to not being able to make the minimum payments on the NFCU credit card?
What amount of money did you agree you would put into your Freedom Financial escrow account each month when you signed up?
I ask because I can project some time frames and costs to solutions with some basic info.
Michael
Ok, I put in call to debt collection attorney today, still waiting call back. I understand that I need to make my case for hardship, however, I wanted to know what I should and should not disclose. Do i need to tell him exactly where I work? How much I make? Details as to why I fell behind on payments? ( it was due to medical condition! and rather not disclose details to him). Or should I just politely tell him I rather not disclose it and get right into negotiating? I know you said they are paid based on percentage collected. They way I see it is if we can come to agreement quickly, it’s basically easy money for him…….
Thanks
Vic – They may be under contract too, but performance based is more likely.
As for disclosing fact about your hardship, you should, but not the minutia. Like you are already thinking, it could be something as simple as saying “I experienced some medical issues that meant I could not longer work, and have ongoing issues that are limiting my ability to earn money…”, or “Due to a medical condition, my ability to earn a stable income is gone, and the condition has not stabilized, so I am not sure how much additional medical costs there will be. I have family willing to help me, but there is only so much to offer….”
You get the gist.
Michael,
Ok spoke with attorney representing NFCU. I offered 50 percent on the dollar to settle. He called me back saying NFCU said 90 percent on the dollar. Also stated I could pay lump sum up front and remainder over a reasonable amount of time say 30 to 90 days. I was thinking of countering with 75 percent which is where I’d like to be, in reality 80 would do also. Think I could press it or too risky? He didn’t seem like it was urgent either. Said I could call him back on Monday.
Thanks
My experience suggests you will hit that settlement target now, or anytime in the future. 80% settlements are quite common when sued even.
I would counter if I were in a hurry, or wait some knowing I could probably get 80% in September, and perhaps get lower because the account has gone another billing cycle without payment.
Michael,
I have a nfcu credit card balance of 7k, currently 100 days past due. Also, an unsecured personal loan for 14k, about 90 days past due. No checking or savings with them. I have been receiving all the usual letters and calls attempting to collect from them. Loans were used for an investment gone bad. I am employed full time.
What are my options as far as settling?
Should I let the CC go to charge off and settle from there?
Additionally, I received a letter today from them threatening to sue. How often, or willing is nfcu to sue?
Thanks,
Vic
I do not see many Navy Federal Credit Union collection lawsuits currently. But that really should not offer any comfort. The risk is real regardless of the percentage chance. The risk of being sued can increase with some creditors if you meet certain collection scoring, or ran up debt quickly on new accounts before the inability to pay hit.
As for settling with NFCU before your accounts hit the collection pipeline – can you pull together 8 or 9 k from whatever resources you can? How quickly?
Michael,
Thank you for reply. Yes, I can come up with that amount, but may take several months. Will they be willing to settle for a certain amount with payments spread over say 4 to 5 months?
Also, do they solely perform their own in house debt collections all the way to litigation or they eventually charge off/ sell debt? I read that they have debt attorneys in house ready for litigation….
Any advice on getting them to stop calling work and family? I advised them twice, but received calls since then on work voicemail. I found that they don’t call if I answer my cell phone every day they call.
Thanks again
You will want to get started pulling the money together if settlement is your goal. You could need less than what I estimate, but should prepare for 40% to 50%.
NFCU, like other credit card lenders, cannot offer more than about 3 months of payment terms when agreeing to settle debt not charged off. Settling with a debt collector later on can sometimes include better/longer monthly payment terms, but I still advise against that whenever possible (it isn’t always).
NFCU does have their own collections units. I am not aware of NFCU regularly selling unpaid credit cards to debt buyers.
Next time you get a call at work, ask to talk with a collections supervisor. Open with the financial hardship you are in, and are trying to turn around, but that calls to this number are at all times inconvenient. You can be reached at the following numbers (provide cell, home), that calling family members when you are being reached at the numbers they have on file may be construed as harassment because it is not for location purposes (they are locating you successfully already).
See what they can do about those calls. You should also consider talking with an experienced debt collection attorney. The type that fights for our rights as consumers. Discuss the calls NFCU is making to family members when they already are able to reach you. See what kind of feedback you get. Attorneys with practices that focus on collection violations will often take cases without charging you at all. They get paid by the other side if the action they bring is successful. If you would like a referral, post the name of a nearby city. I will email you contact info to one or more attorneys with the experience you need.
Michael,
Thanks again for the advice. What timeframe am I looking at for NFCU to take action legal action if any? Is now a good time to negotiate a settlement? I assume they just don’t let delinquent debt carry on for the next year or two….. Basically, is time on my side?
I am located near Paramus, NJ.
Thank You
No, time is not on your side. If you want to work this out directly with the credit union, try to in the next 90 days. You can still negotiate settlements after that. You can negotiate a deal even when sued, but the savings is often not as good as when not.
Michael,
Just got off phone with NFCU. They stated that paperwork for loss litigation has been drawn up, but not submitted. However, they were willing to settle on CC for 6k, I offered 3k originally. Counselor then proceeded to say that in order for them not to submit loss litigation, I would have to make account current. Kind of sounds contradictory to me……. Do you think the litigation part is a scare tactic at this point in game?
They also willing to bundle both loans and reduce interest rate.
What’s my next move?
Thank you
Can you afford the consolidated monthly payment they are offering? Is it around 320.00 a month?
The 6k offer is not much of a savings. They do go lower. You could probably settle for 6k with the attorney they send it to, so waiting for another 30 to 60 days to see the offer get something more affordable is not a high risk move.
There is not much of a point to bringing the account current given your stated goals, and your ability to raise the money you need.
As far as the threat of litigation, it sounds like normal collection speak to me. It is a risk when defaulting on most any debt. Pointing that out to you is absolutely a scare tactic.
What are you inclined to do?
Michael,
Yes I can afford a consolidated payment just to keep them off my back, but my main goal is getting out of debt. Lowering interest and extending terms of payment just keeps me underwater longer.
What I’m thinking is placating them for the remaining time until right before charge off, then settling. This will give me time to bank the extra money I will need to settle.
The counselor I talked to was the most polite so far, and I have direct extension. I will use that to advantage if any. I advised him that can always reach me at the number given, which he agreed. So, I believe I solved the work and family calls problem.
Now, how to placate them until I raise money money…..? I do believe it is a scare tactic to threaten litigation. Why would they be willing to settle …plus the account is not near charge off time yet….. Is this a correct assumption ? When you say settling with attorney they send to. Can I consider that I am being sued (served with summons, etc) at that point, or just one of their in house scare tactic attorneys?
Thank you
Credit unions, like the size of Navy Federal, will collect some accounts aggressively, but not all. The risk that they will sue this much before charge off is not high, but not nonexistent.
I am with you regarding waiting, and roughly till month five, to see what settlement can be negotiated. That timing is more consistent with settling debt directly with lenders in general, and also because even if they do send to a collection attorney, you can settle for at, or better than, the offer on the table now (with a lump sum payment usually).
You will often get collection letter from the attorney prior to their filing a collection claim in the court. This is a good opportunity to settle before the account gets to court. And you can also settle once sued, and get the case dismissed.
Their use of attorneys in collection efforts are both a scare tactic and a reality. Using those often carefully worded sentences and phrases that do not say they are going to sue, but leave people with the impression they will, and this early in stage one collection, is more on the tactic side.
My husband has $24,000 credit card with Navy Fed that has been charged off since 6/12, sent to collections 10/12. He would only have about $200/mo to put towards this debt or take money out of his IRA for a settlement amount. His other credit card has also been charged off but he is making steady payments for the last 16 mo at .99% and can continue that to pay off the remaining $6500 balance. He has no other accounts Navy Fed. He is current on his student loan and motorcycle loans. Collectors have not found me yet, but I am concerned that being in a community property state it is only a matter of time. This card was opened before we were married. We applied for a VA mortgage and qualified if we can get rid of the Navy Fed debt or show s payment plan. Looking for any suggestions or comments – thank you
He would need about twice that amount to get the Navy Federal account on some type of hardship repayment like your other credit cards appear to be on. You could pay down the debt with a larger lump sum of money, and then get the monthly payment on the remaining amount owed to an affordable level. But at this point, settling the balance for as much savings as can be negotiated is a better option.
How much do you save with the mortgage vs renting?
Is the local home market a healthy one (are values appreciating vs foreclosures and shorts sales dominating the for sale markets)?
How much financial sense does it make to tap lump sum resources to settle with NFCU at this time?
Hello,
I have a credit card with NFCU and it has been charged off. The total debt owed is $2900. I am in disputes with items on my credit report and have been successful getting some derogatory items removed. I am currently on the boundary of being pre approved for a home loan. My last hurdle is this NFCU account. I am trying to determine if there is any difference reported on my credit report for settling at this point or paying it in full.
In my experience there would be no additional benefits to paying in full vs negotiating a discounted pay off amount, and paying that in full. Your goal is a zero balance owed on your reports.
If the home loan pre approval is FICO credit score based, you may experience a slight dip in credit score from the freshness being added to a derogatory item. It is often a short lived dip. If it is unresolved debt reporting like you indicate, you should look better straight away. Also, not all scoring and loan approval modeling use FICO. Vantage score has one that does not factor in paid collections at all.
Would there be any comments which stated paid but settled for less than full debt? Also any idea about how much it could immediately raise my score or how long that would take?
There are credit report comments like settled for less, but this too makes little difference with already charged off/late stage collections like your NFCU account is in.
Everyone’s credit report and score is going to be impacted by stuff that is unique to you in them. I cannot guess at it in isolation. I would need to see the whole thing, and even then, it would not be the tri-merge credit report that is likely to be used for underwriting and pricing of a home loan.
my experience is quite different than anything I read here/ I had a rate at 4 percent, and limit of 10K. went through a horrible divorce and lost my job for 7 months, I kept paying the min. NFCU offered a limit increase to 17K, then 25K then 33K. I kept paying. Got a job, start doubling down the payment, they raised my rate to 7%, then 10%. I kept begging to lower. I never missed a payment and at this time I was not using the card and paying it down. I lost my house, I should have file bankruptcy. But I felt obligated as they really saved me while I was out of a job. Then they raised my rate to 16% I owed 32K in July 2008. By the time Dec 2011 came around I paid over 25K to the credit and still owed over 20K I never used the card, just paid about 1000 a month. They told me to enroll in credit counseling and they would lower the rate. I did and when I finished they denied lowering it. Then one day while on a phone call the manager yelled at me and said , there is No one on the Planet that can get your rate lowered. Just suck it up and keep paying like you have. You have done a great job. Yea Paying 25k and only 12 going to principal. Mind you when I was out of job they keep no problem keeping the rate very low and getting over me upper limits. As soon as I started the fast pay down and stopped using the card, rate in crease after rate increase.
I have been now two years in court fights with their collection agency. The first year I had the case dismissed after 14 months. I kept doing everything the court asked and all these people want is default judgements. They missed to hearings. Case dismissed. That did not stop them They just refiled again this year and now they over burden the court with tons of gibberish paper work. I keep protesting that the case was dismissed but the court is allowing them a second chance at me. Again they are asking for default judgements. NFCU didn’t work with me in settling. They were cruel, vicious and heartless. The collectors since the case was dismissed last year, as now brutal with requirements and its very hard to keep up with them I also believe they have a judge on the take as they always work it so other arbitrators and judges are switched and it always ends up back with this one judge. Last year I found that and they pushed me to a new judge, case dismissed, Now they just refile like last year nothing happened and are pushing for their buddy judge again.
Hi there I recently inquired about my car loan. Well I’ve paid it off a few weeks ago. But when I called to pay it they did not tell me exactly how much I owed instead immediately said I can pay $2500 and be done today. So I did I paid it all at once and the lady said you are done. She said my accounts should be unlocked in bout a week. I called this week to find out why my accounts were not unlocked. I was told because I settled I can no longer bank with them. I am very upset bout this because I was not told this wen I called to pay. I would have paid the full amount had I known this it was told. I feel like u was tricked into paying all of that money all at once and lied to. I def. asked her can I use my accounts after I pay and she told me yes. (Also she was very unpleasant and had a seriouse attitude since the moment I was connected to her… At this point I still revive montly statements about my accounts. Non of which state my accounts are closed. But wen I go online it states a constitution exists on my account and to call navy federal… Is there anything I can do about my accounts?
Mike – Escalate your concerns to supervisors and executive offices if necessary. Let them know you feel you were misled and deceived. What they did may have been policy, so I am not sure what escalating your issue will lead to. Post an update as soon as you know the result of that and I can offer more feedback.
hah I did that. Got to the top and was told “There is NO one on this planet that can lower your rate. You have done a great job, not using the card for 2.5 years. Paying 25K to the Credit card. Card went down from 32k to 21k. I quit and now have been fighting with them and their lawyers for over 2 years. I won the case, it was dismissed. The attorneys just reopened a new case against me ignoring the previous judgement and the said thing is I can’t get the court to stop it. The court set up an arbitrator and we are in the exact same position we were in a year ago. The court system sucks, attorney suck as all they want is default judgements, no mitigations.
Hello…I’m quite embarrassed to be asking such a question but I honestly don’t know what to do. My husband is active duty military and we are struggling to make ends meet. We have a credit card with a balance of 16k and we are behind on one payment. Navy federal won’t reduce our interest rate because my husbands credit is taking a downward spiral. They offered for us to do an application for hardship but we are worried that by doing said application, it will get back to his command and could cause issues with why we are behind on our credit card payment. Things at home have been rough, and we are trying so hard. I work full time and it just seems that even though we are frugal, we can’t make due..thank you.
CJ – Are there other unsecured debts besides the 16k with NFCU? Before singling this account out for a hardship repayment plan, it may be better to approach all of your debts with something like that at the same time.
Well we have a 14k personal loan with them and our car loan is through a different bank. I am not sure if this will effect my husband or I. That’s why I’m hesitant to do it.
So a total of 30 thousand in unsecured loans. Can you come up with 600 a month for minimum payments on those 2 combined accounts?
I am asking these questions to help determine what affect there may be, or potential ways to avoid certain affects.
With everything else it is almost impossible. We keep trying and every time we make a payment we always have to use the credit card for something we need. Its ridiculous. It feels like we can’t get ahead at all.
If you can swing 600-ish a month, and consistently, you can be out of debt in under 60 months. You will not use the accounts anymore though. If Navy Federal’s hardship payment plan is only temporary, or not available for both accounts, try working with a credit counselor. What Navy Fed may not offer you (lifetime lower payments on both accounts), they may make available to you through a nonprofit agency. You can call 888-317-8770 for a free consult.
You would typically not see much of an issue with active duty personnel working with a credit counseling agency. He can talk to his CO about it once you determine that it is a reasonable path.
Hi, I’m in a situation where I had a navy federal account in 2007 misused some checks and had a car loan for $9900 made a few payments before I hit rock bottom lost my job, was using drugs and ended up onthe street, I just got my life together I have a full time job and want to reopen a navy federal account, will this be possible after all that’s happened. Looked at my credit and the loan and charges on my ac lung have been a charge off? PLEASE HELP
shelly – I would look to another bank for your new account. Is there a reason you would like to continue banking again with NFCU?
I hope you can help. My husband has over 47000 in credit debt with Navy Federal. He hasn’t paid them since Nov 2013. We are putting money away to be able to settle at some point. 60% of my husbands income is paid into child support. Needless to say we are scrapping by at this point. After we pay the modest bills we have left and put money into an account to be able to do a settlement there is only 187$ left for food and gas a month. My husband is deployed right now so it’s just me trying to live off of 187$ but once he’s home that two adults living on 187$ a month. So I would like to surrender my car to Navy Federal so we can eat. If we weren’t paying that car payment we could buy groceries. I can use the little we have in the debt account to buy a very cheap car so we don’t have to make a big car payment every month. And we can add 100$ towards the debt account each month. We really need to get out from under this mess.
Celeste – If your goal is to surrender the vehicle to Navy Federal, you should call and get the details of how exactly they normally handle that. Once surrendered, Navy Fed will auction it. The price paid at auction is often not enough to cover what you owed. What is left owing on the car loan after auction will become a new collection account, but unsecured, like your credit cards with Navy Federal.
Your goal of negotiating settlements with Navy Federal will probably be one account at a time. How many different accounts are there? What are the approximate balances?
Your husband has some great protections from creditors and collectors while active duty and deployed. You both should also talk to a bankruptcy professional about what chapter 7 would like like for you now, and in the near future.
Hello Michael,
I am a Mortgage Loan Originator working with a buyer who has a car repo through a federal credit union with 15k owed from 10 years ago. He called the attorney handling the collection today to attempt negotiations and was told that federal credit unions do not negotiate whatsoever. My deal is not a deal till my guy gets this debt negotiated and paid off but doesnt have 15k.Please share any advice you may have.Thanks.
Marco – Is this a judgment?
Not sure what the comment abount credit unions not negotiating was all about, but I can assure you that anything that same person says should be taken with a healthy dose of skepticism. It would be nice to know the name of the attorney who is so willing to lie to people. It may be that your buyers file is tagged to not settle – that does indeed happen. But to say that credit unions do not negotiate whatsoever is patently false.
Hey there! Just curious when you said “your buyers file is tagged to not settle” … why the bank would do that???
Most of the time I see a refusal to settle it is because:
The consumer is viewed as a high collection target.
The debt was new.
The bulk of the balance was from recent transactions just prior to default.
Recent balance transfers.
Recent cash advances.
Luxury purchase in the months leading up to default.
Small bank syndrome.
Hi I have an auto loan for $7000 I paid it down to $5000 before I lost my job. I let them kno wen it happened and they gave me a hardship option the loan originated in oct 2011. I haven’t been able to make a payment since June 2012. I know am in a situation to settle I see on my credit report the loan has been charged off. I do not get calls from them or any letters any more. I did see a settlement letter for $3800 but that was a year half ago. I just simply want to get this off my credit but don’t wanna pay the full amount. How dies my situation look? I also have a savings and checkn account with them I don’t use anymore due to them takn money out of them to cover the car loan soon as I add it in. Once I pay da car loan off I’d like to continue to use my two accounts again if at all possible. Do u think they would be willing to settle for $2500-$3000?
Mike – Settling will not get this off of your credit report, but it would get the account updated to show a zero balance due, which would help your credit in certain situations. Once settled, you should be able to go back to using your bank accounts with Navy Federal.
I have a NFCU CC with a $15K balance. I would like to settle it with them, but they have told me they don’t settle. I think that is just their blanket statement. I am sure if I got around 90 days past due they may change their tune a bit.
Seymour – Talking to Navy Federal Credit Union about settling your account (or any credit card lender for that matter), when you are in the first month or two of delinquency is not typically the best use of dialogue. I have found it best to just let them know you are unable to make your minimum payment, or virtually any payment, and are looking into any and all options and resources to deal with your situation. Any negotiating and settling should be reserved for when they bring up the option, or when you bring it up at the most optimal time to get the best saving (generally between missing the 5th and 6th monthly payment). I would highly recommend you read through the sections of the debt settlement guides on this site that focus on settling with original creditors: https://consumerrecoverynetwork.com/credit-card-debt-settlement-program/.
Hi Michael,
I am several months past due on my credit card balance of $20K, and my car note is current. How do I handle a settlement with NavyFed? They just keep harassing me at work, home, cell, and my relative. I just need them to stop contacting me. I don’t have it. What do I do?
Thanks!
FLT – Is your car loan through Navy Federal too? How many days late are you exactly? Do you keep a checking or savings account with Navy Fed? Knowing the answers to these questions will help me offer better feedback?
write them a “cease and desist letter”. This letter pretty much stops them from calling you and stops them calling your relative(s). Make sure you send this letter to every collection department at Navy Federal CU and it is a certified letter, have them sign it confirming they received it.
sugarbear – When creditors and debt collectors receive cease communication letters it leaves them no choice but to communicate through the courts. And most folks do not want to be sued.
My fiancé owes two loans to Navy Federal they wont even talk to her about settling for half. I believe one loan is for 8k and the other for 24 k,last payment was sept of 2011
Kyle – What types of Navy Fed debts are these? It is a bit unusual for there to be no ability to negotiate a settlement after this long has passed without a payment. I can offer feedback as to why that may be, and how to make progress, but the type of loan will change my feedback.
Also, does she have other loan products or accounts with Navy Federal?
One is a credit card for about 20k the other is a consolidation loan that after looking onto it closer she has a letter stating if she paid $55OO it would be settled, come to find out she paid it the $5500 and they S sent a letter stating thanks for the payment but you still owe $4850,,she has a copy of the check and the original letter stating if paid it would be settled.
my understanding is the guy at Navy Fed basically said they will not settle for anything less. shes went through some trauma as her house burned 2 years ago and she has some cash to try and make some of her past right.
Thanks for your advice.
Kyle
Kyle – Does the letter from the credit union offering settlement have a date the 5500 would need to have been paid by? If so, was the 5500 sent in prior to that date? That could be something to clear up with them first, or last, after having settled the larger balance. I can review the letter for you if you do not mind emailing it to me. If so, send a scanned copy to the same email you get these comment notifications from. You are welcome to black out her name and address, acct number etc. I will email back feedback about my impression of the letter.
Not too many credit unions offer great settlements, or optimized work out payments. Navy Federal is an exception. They do settle with their members. Your target in negotiating a pay off with them will be between 35% and 50%. The higher end is the most realistic expectation to have. But being set back by a house fire is a hardship condition that can often lead to better results.
While I offer free feedback through the site, you can always reach out to one of the specialists for a phone consult, or direct assistance, at 800-939-8357.
I have been offered a settlement of 30% of my Debt by NFCU. Roughly 7k to settle 24k of debt. I haven’t made a payment in over a year, and have already been charged off. I’m actually going to call them tomorrow and offer all the money I have. (4k) and see if they will accept it!
James – That is a great offer from Navy Fed. Getting them to go much lower may not be successful for you, but I have seen some NFCU settlements go lower than than floor for different reasons. Yours may be one, so go for it. You may also want to consider some type of installment settlement where you agree to the 7k spread out over say 3 or so months if you are confident you can raise the rest of the money (if they are sticky on the 30 percent offer).
Post a comment update with how things develop. It will be helpful for later readers.
Michael,
It’s been 3 yrs since I paid off my NFCU credit card via debt settlement. During that time I still had a 14k personal loan and a second $4,000 personal loan outstanding. In 2014 I had put down a lump sum on the 4k loan and didn’t need to make payments until 2017. I currently owe $1,000.
The 14k personal loan has been with their in-house collections for past 3 yrs. They do not call or harass anymore, they just send me a letter every 2 months stating settlement offers, which change each time. Some are really good offers, the best was about 20 percent.
I have 2 questions. First, what may be going on with the 14k loan? Will they go to litigation since been so long? Should I keep ignoring? Second, if I make a payment on the other good $1,000 loan, will they cross collateralize it and apply to 14k loan to “start the clock” again? Or should I let that one go through the collection pipeline too? Keep in mind, I had no communication (payments, calls, etc.) with NFCU in 4 yrs. Not sure if they will go through the proper pipeline, i.e. 180 charge off, collection calls, etc., for the $1,000 loan. Or knowing my situation with the 14k loan, just discharge it…
Thanks