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
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.
My auto loan with NFCU is now in charge off status, transferred to recovery department. The last statement I received, which was in February, at >150 days past due, showed that my account had past due balance of $1800, and $2100 currently due. The loan balance was $12600. I called and spoke to someone with member services, set up a payment, provided my new mailing address. I was told nothing about my account soon to be charged off at that time. I then began submitting regular payments as I could afford it, over the following 6 months, totaling approximately $2200. The payments were accepted and applied from what I could see on my end over these last 6 months. I never got any statements at the new address. When I reviewed my credit report this week, I saw the auto loan status as charged off, as of 3/31/16. It shows my most recent payment, so I can see they are applying my payments to the balance. The account balance is now listed at $11000.
I am still in possession of the car. The value of the car is probably $2-4K less than what is owed.
I have a significant amount of debt in collections, an eviction collections account, along with a deferred consolidated student loan, all of which began piling up with the past due auto loan when I relocated for a new job in 2015, then subsequently lost it.
I now am unsure what my best options are, and how to approach NFCU about the loan charge off. I’m considering bankruptcy (pending consultation) so I also don’t know how that would affect things.
I would be able to afford to pay about $2k if they would accept it in return for removing the account from collections, since that’s approximately what I believe would’ve been still due based on my normal monthly payment of $330, to bring it “current” so to say. But I don’t know if that’s even something they would consider.
I would not be able to afford paying off the entire debt. Nor do I think that would be in my best interest, all other debts considered.
I am now employed in a stable position with a small bit of savings, so I am hoping that I can prevent any of this from becoming worse.
Finally, do you know if I would be able to communicate with NFCU about this matter by mail or even email? I get incredibly tongue tied when these debt collectors start pressuring me and I would prefer if I had paper documentation of the correspondence. They are so intense! I already feel bad enough.
Thank you so much for your advice.
I would wait until you talk things over with a bankruptcy attorney. If you can do a chapter 7, where you discharge unsecured debts, and can reconfirm secured debts, like your car loan, it may be the best course.
If you cannot qualify for chapter 7, or otherwise want to avoid it, post an outline of your debts (who you owe, and how much), and I can walk you through some options to think about right here in the comments.
Hi Mike. I foreclosed on a NFCU mortgage in 2015. My credit report shows a zero balance with them even though there was a $35,000 deficiency. I never received a 1099-C but it’s still showing zero on my report. I also have a NFCU HELOC which is on credit report and shows a $8,000 balance, no payment since 2015. I also have a NFCU credit card which is on credit report and shows a $4800, no payment since 2015. I will soon call them to attempt settlement on the HELOC and credit card. Can I negotiate that they forgive my mortgage deficiency (assuming they already haven’t) for making payment to settle the other two accounts? Also, is it necessary that it states “paid in full” on my credit report if I settle for less? Also, can I request that they don’t report the cancelled debt on a 1099-C in exchange for settlement payment? Thank you.
You may not need to do anything about the deficiency on the first if it is no recourse. But call in for a consult tomorrow to go over your particulars. You can reach me at 800-939-8357, ext 2, or just fill in the talk to Michael form in the right rail of this page so I can email you in order to set up a time that works for us both to connect on the phone.
Resolving a collection account on your credit report that is this old will cause the zero balance owed reporting. That is all you care about. The paid in full or for less means little once the account gets charged off.
You cannot offer NFCU money and request that they not follow through with their tax reporting obligation. They are typically not going to go for that.
I know that Michigan is a recourse state but don’t know if my mortgage is non-recourse. It was conventional. Fannie Mae, both 1st mortgage and HELOC serviced by NFCU.
Okay, thanks. I will have some additional questions when we speak. Today is a travel day, but I will be back in the office tomorrow.
Hello,
I settled a credit card and loan with NFCU last fall. I have a question about how it should be reported. The loan is noted as being paid, while the amount written off on the credit card is noted as being past due. Is this something I can challenge with the credit reporting agencies?
After settlement the credit report will typically show a paid collection for less than the balance owed. What is the amount Navy Federal is showing as due as of today on your credit reports? Are all 3 credit reports showing the same thing?
I believe so. I wasn’t able to get TransUnion. They are saying that it is 19K past due.
I just double-checked on myFico and all three are reporting that I have 19K past due. I also noticed they list the card as open and not closed while in the remarks it says a variation of “account closed at grantor’s request”
And, oddly, they reported the payments late for the 4 months prior to the month we settled. The month we settled is reported as being paid on time. time. Then, for the next two months it is reported as late again and then no more reports.
Check out this article about filing credit report disputes to get this corrected. Let me know how it goes.
I’m a veteran with a service connected disability. My disability worsened. Because of this, I could not keep a stable job. I, then, petitioned for a higher disability rating for a larger compensation with the VA. I asked NFCU to wait for payment until VA decided whether to increase my benefits–suspend my account. Still, they piled fees and sent my account to collections, which consisted of 2 credit cards totaling about 20k and locked account. I told collections several times my situation. They called several times a day, so I told them to stop calling. NFCU started using my small disability compensation payment to pay the credit cards. I had to switch banks. Anyway, now, VA approved disability increase. However, my cards were charged off. This played out over the course of about 2 years. Do you think they would reinstate them because of my situation, and If I have to settle, could I still bank with them? In any case, I’m wanting them to delete the charge offs from my credit reports or sue them for not doing so.
And If I do get them reinstated, I want the credit cards to be at the very balance that it was before the first late charges.
It is just not going to happen.
Also, I have a legitimate claim and it could happen. “Navy” federal are supposed to be representatives for service men and women. With their name, they assume responsibility in helping those who served with types of special needs that they may have. What other special need is greater than supporting a naval service men or women who have been disabled because of combat and cannot work? If they are not willing to help vets and active service men and women through this period of time after a disability has ensued or gotten worse, then they should not hold that name. I will sue, and I will win if they do not take it off, but I’m willing to negotiate.
NFCU followed their normal procedures for how they treat an unpaid account. You will not be able to get charged off accounts reinstated. You will be wasting time and money suing to get legitimately unpaid debts removed from your credit reports. Settling for a reduced lumps sum amount will get your credit reports to show paid collections which is all you need to reach other financial goals.
Can you pull together 30-ish percent of the balances?
I apologize, but, nope, I cannot settle for that. I need it off my credit report. What would be the % to pay to get it off now?
It would be unusual for them to remove it. There is no legal requirement to do it, and banks tend to focus on meeting their legal requirements, not exceed them. Will they make an exception for you? I cannot say, but it is not something to count on. Most financial transactions we want to go through will be able to proceed with a paid collection on our credit reports.
I have done settlements as low as 25% with NFCU. I often caution against telegraphing a credit goal or need for something to be removed. Debt collectors will tee off on that as a means to try and collect more from people.
Hello Mr. Bovee
I have a credit card debt of 45k, 2 personal loans with NFCU that total 44.5K, 1 car loan with NFCU for 26k and another personal loan with USAA in the amount of 43k. everything is current except for the credit card which is 3 months past due. These monthly payments have consumed all of my income and i can no longer live in a comfortable manner. how do i go about getting my creditors to settle for 30-40% of unsecured debt? You’re insight is appreciated!
There are some benefits to your accounts being with Navy Fed and USAA, but also some draw backs. Your car loan can present an issue, as can other accounts you may have with the banks.
I highly recommend calling in for a consult before you go any further. You can reach me at 800-9398357, ext 2, or fill int he talk to Michael form in the right column of this page. Those submissions all come direct to me. I can email you to set up a time to connect on the phone.
Hi Mr Bovee, I stumbled onto this thread and was wondering if I could ask a question about NFCU please? It involves a 2nd mortgage that I have with them that I defaulted on 4 years ago?
They did a charge off on it and moved it to their collections department. I reached out to them about 3 years ago (after securing a loan mod on my 1st), and was successful in getting a loan mod with them as well. Since then, I’ve been paying the payments on the agreed terms perfectly. My current balance is about 24K. They did give me a 50% reduction in principle and a 50% reduction on the monthly payment, with 0% interest until the loan is paid in full. They also waived all of the back fees etc. I did get this in writing on a form with their letterhead, signed by the collection agent that I was working with. My question is this: They told me that they won’t update my credit report until this loan is paid in full and at that time they will 1099 me for the forgiven amount. Does this all sound legit? I’m keeping very detailed records on all the email exchanges, and banking drafts for the monthly payments.
Also, I want to pay this thing off really soon, but I’m afraid to send them extra payments. When I secure the amount to pay it off, would you recommend me getting an attorney to ensure things go smoothly. Obviously, I want the lien removed from the property. Thank you kindly, Charles.
Your agreement to settle the second mortgage with NFCU sounds good. It is normal to not update your credit reports until resolved on charge off accounts. And the 1099c reporting to the IRS is also something that does not occur until the last payment on a settlement (when the remaining is then cancelled by NFCU).
I would not personally use an attorney to complete this. You have the agreement to pay half in writing, and you have access to your bank account to show proof of timely payments (as long as all payments to NFCU were made on time). I would move forward with payoff in that case, and if things go south, only then consult with an experienced foreclosure or collection defense attorney.
Post an update with how you progress, or if anything goes wonky and I can help you.
Settling credit card debt with navy federal
Did you have questions or concerns about your situation Navy Federal?
Hi Michael,
I have filed a Chapter 7 bankruptcy with majority of the debt being NFCU. I have 1 car loan, 3 personal loans, and a line of credit with NFCU. Would it be possible to do a settlement for the car loan with NFCU? If so do you think they would take the Kelly Blue Book value of $7,500.00 regarding a car loan that was/is $25,000.00 at the time of bankruptcy? Thanks!
If you want to keep a car you are still paying on during a chapter 7 bankruptcy you typically have to reconfirm the loan and pay on it like normal.
If you are talking about discharging all of the unsecured Navy Federal debts, and then after all that dust settles, circling back and getting NFCU to accept $7500 on a $25,000 loan – and you get the title – no, I see no real chance of that. They will move to repossess more than likely, and the deficiency balance after the car is auctioned would not have been in your bankruptcy.
hi Michael,
will nfcu settle my credit card even though I am on time paying it? I can feel I am heading down a dark path and will hit rock bottom if they wont settle it for me. please advise what I should do.
NFCU does settle with their members, but not when you are current with payments. Even if they would, it would not be for the type of savings you will see later.
Why the hurry?
Do you have other loans and accounts with NFCU?
I have checking + saving and 2 credit cards with NFCU, both credit cards equaling to 18k. I am not in a hurry but I do want to just pay it and get it over with. It’s been 2 years and I feel like I have not made a dent in my balance. I am over paying more than the min but more than half of it is going towards the interest charges. I’ve asked if they can lower my interest rate but they recently told me they can not do that for me at this moment. With rent, car insurance raising every year I just find it harder and harder for me to keep going. I have recently taken up on a second job to help pay this off, but the pays sucks and feels like I am working just for gas money.
‘Even if they would, it would not be for the type of savings you will see later.” <— what do you mean it would not be the type of savings I will see later? please elaborate if it's a bad route to take. I want to be in good relationship with NFCU still… I mean if I have to keep going at it slow like this then I will… I just need the best advice you can give me to be on the correct path in financial. thanks Michael.
Call me to go over some more details over the phone Pam. You can reach me at 800-939-8357, select option 2 to ring my phone. You can also reply to the comment notification email you get from the site with the number and times that are good to reach you. Those emails come to me.
I usually target settlements with NFCU credit cards at 40%, but you often want to go about that a specific way.
Hello.. I have a closed credit card account with $1300.00 on it, also a personal loan for 13k. It has come to the point that I cannot afford it anymore. I don’t have any other accounts with them and don’t desire to do business with them anymore. I recently signed up with Freedom Debt relief, but I feel like they really aren’t doing much but saving my own money for a settlement. What should I do? The payments are over 180 days late.
Can you come up with 5k right away in order to settle this much more quickly than Freedom Debt Relief often advertises?
SIr, I Have $8500 in Navy Federal Credit Card Debt, and a Consolidation Loan at $6000. I have been paying on these for over 5 years, and I dont think I can afford it anymore. I have paid enough in interest to pay back the loan I feel. Do you have any recommendations? Is it possible to settle? I have not missed a payment and Im up to date with everything, Thank You
Do you have other financial products with Navy Federal other than the credit card and personal loan? If so, what are those accounts related to?
Do you have other credit cards and unsecured loans besides these two? If so, what are the balances and who are the lenders?
No Sir that is it, I have no other debt with navy federal, or anyone else for that.
Okay, thanks. With just the Navy Federal accounts I would indeed focus on settling those accounts if you can no longer afford to meet the minimums.
Assume for a moment that you could settle both accounts with NFCU for 6k (perhaps a little under that). That is the amount of money you may need to accumulate over time, or quickly (borrowing from family or friends for example), in order to fund settlements negotiated with NFCU, or with debt collectors.
Your credit is going to take a hit until the settlements are out of the way.
Would I Need to let it go into collections before I try to settle?
Not necessarily, but it can help in some instances. Even if you negotiate the deal directly with Navy Federal it would not likely happen until you are 5 months or more late.
Have debt with Navy Federal. I reside in Georgia.
Lost my job in 2013 and my once stellar credit was ruined. The loans and credit cards were charged off and they were able to get a judgement. I thought when the papers came that they would send a court date, I really only had so many days to respond. I could kick myself.
A GA attorney put a levy on my bank account for NFCU. It was released after I paid an attorney here in GA $1500 and agreed verbally to pay $200 a month. It almost sounds as if the attorney owns the debt and will settle on life time payments. As a result I no longer have a bank account in my name.
The problem with $200 a month is that I owe 55k. Yes, $55,000, part credit card and unsecured loan debt. It would take 22+ years to pay off. I can’t even remotely believe that NFCU agreed to a 22 year pay off.
A BK13 t would be payed off in 3-5 years and off my credit in 10 years. A BK7 that I qualify because of my income would be erased from my credit in 10 years. Either way a BK7 or BK13 would be off my credit in 10 years and it makes no sense for me to pay anything for 22 years, which is 12 years past when a BK would be erased.
I am trying to do the right thing and pay them back atleast a portion of the debt. Nobody should be punished for that long for a mistake. They get nothing if I file a BK7, but the car. I will find a used car somewhere if I cant trade out of this one.
Not sure if I should just sign the paper from the attorney and buy more time until the car loan is paid off. Would they even give me the title if I am in a payment arrangement? Is it better to trade out of the vehicle and would they have to give title to new dealer if that happens? Is it better to trade out of vehicle?
I own a house and the payments are up to date. I own the a vehicle financed through NFCU which I owe about a year worth of payments. I was made aware of the cross collateral recently so my vehicle is at risk if I file a Chapter 7. Though I am considering trading out of the car so that they don’t hold the title anymore. I was initially told that my house and car were safe (however the attorney didn’t think about the cross collateral issue with the car)
Should I call Navy Federal myself and make sure they received the $1500 and attempt to make payment arrangements with them? (the 1st letter the lawyer sent me to sign had no mention of the $1500 he had received in it. I had to ask that he put it in there. He also wants all payments for the next 22+ years to come to him. So not so sure he is on the up and up.)
I offered $1500 a month and $200 a month for 5 years. $200 is my limit because my salary is super low now.
You could be in and out of the chapter 7 for as little as 1500.00. I would encourage you to pursue that. You may be able to confirm the car loan and keep it after the bankruptcy (if you even want to). Talk to an experienced chapter 7 attorney about that. I would encourage you to read this article about how to find the right attorney for you.
Who is the law firm that handled the original suit? Is that the same attorney you are in contact with now?
I signed up with a debt relief program. I got sent a letter the other day from my credit union being summons to court. Ive asked repeatly for paperwork for them to send me so i could give them information on who took over account. I got no letters, no phone calls. I pay for a attorney through the relief program and they are gonna be contacting me So whats my next step? What am i in for with all of this? i have no problem paying them back but i had so much debt i needed it consolidated to 1..
Who is the debt relief company you hired?
Is the named plaintiff in the lawsuit Navy Federal, or another company (NFCU has sold debt in the past)?
What state do you live in?
My son recently died without a will. He has checking, savings acct and a small unsecured signature loan with Navy Federal Credit Union. He was a South Carolina resident. I provided bank with death certificate and a probate court authorization for them to reveal acct balances. They provided “date of death” balances. (7march 2016). They said that * I will transfer funds from his checking account to pay his loan. “. Should this occur or given that is is after his date of death should these moneys remain until probate occurs? I am also aware that at least two payroll checks were deposited after his death. Can these monies also be used to pay any loan/ monies he still owes bank?. Once he’s deceased I thought nothing from his accounts could be disbursed until probate court dictated it.
It is not uncommon for the bank account of someone deceased to still carry out basic functions. I had this happen with my fathers account after he passed. My sister was the executor and she paid some bills off, and made other transactions, from that account. All of this before the probate judge signed off on everything. Are you the executor?
The payroll checks are curious, but could be explained.
It may be that the cross collateral clauses in Navy Federals credit card, loan, and other agreements, allow for them to reach in to checking and affect payments on other accounts, even when deceased.
If it were me I would call Navy Federal and ask about the specific policy they have on this. They should tell you. I would also get a consult with a probate attorney, even if you pay for it. You will be able to wind things down and wrap up your sons affairs with confidence this way.
I am very sorry for your loss.
I would love to keep the small business.
Thank You for everything
Thank You
I can pay the Business Visa behind $238 to get that current would that be ok for the pay off on the business truck for title release right now? Truck is a 2003 loan was $7000 now $1780.
The other accounts Visa, Mastercard, Personal loan, Navcheck add up and might not be worth paying off to get title for truck.
I have a lawyer thinking already BK7.
I have paid off many car, personal, visa, navcheck loans with NFCU many times.
Never late.
Thank you again
Jeff
Okay, thanks. If you are going to file the chapter 7 for your personal debts, and remove any personal liability for business debts, what are your plans for the business? Will it continue to operate?
Given your path to resolving the debts is chapter 7, and your attorney has advised you to pay Navy Fed for the truck loan, I would get that going right away. You may not be filing the paperwork in court right away, but there is often things you can do to prepare.
Curently have the following with NFCU
Navcheck $2000 30 days past due
NREWARDS $12700 30 days past due
PLAT VISA $22,000 30 days past due
Personal Loan $22000 30 days past due
Business Visa $6000 30 days past due
Business Car Loan $1780 Current
If I pay off car now will they send out the title? Lawyer says to pay off now to avoid cross-collateralization.
Thinking on all my options. I paid them of several times and many loans before never been late untill now. Owe many other credit cards and loans outside NFCU as well 30 days past due. Just got hit wih IRS audit $15000 for 2012 2013 and now $22000 student loans due. I have taking all funds to pay off all debts and still owe a lot.
The past due status on several Navy Federal accounts may complicate getting the title released by paying off the loan in full. Do you have any option to bring the business accounts and loans current?
Setting aside the car loan issue, what is your path to resolving your Navy Federal and other debts?
Hey there,
We currently have a CC w/ NFCU for 25K. We are current on payments, the last 4 months have been about a week late (due to pay dates w/ employers changing and being unable to re-arrange when our bills are paid) I am afraid of becoming behind on the actual payment. Our interest rate is 13% and the monthly payment currently is $1075.
We have a CC w/ BOA for 6k and then other smaller loans from Synchrony (care credit, Havertys furniture) for a total 6k as well. We live in SD, own our home and have loans for 3 vehicles. (two of which are w/ NFCU)
The $1075 is seemingly becoming more difficult to pay. We have been offered from multiple companies for debt consolidation and debt settlement from a few. Which have all been fairly tempting, just so we can get the payment reduced. With hope of a new job within the next year, we would like to then come back up to the 1k a month so we can get rid of the debt entirely. Thats the hope at least. Do you have any suggestions? I have called NFCU about a month ago with no help or guidance what so ever. Im assuming thats because we are and have been current on our payments.
Any help from you would be great. I have read through some of the other replies and I appreciate your knowledge and guidance.
Based on the little information I have to go on Crystal, I would suggest you call the hot line 800-939-8357 and press 1 when you hear my recording, so you can connect to a certified counselor, and go through a free session to see if your bills can be consolidated to a lower amount (and single payment). If the exact quote you get is workable with your income and expenses right now, you can use extra money later to pay it off quicker.
That program is not a loan or anything. And it will not harm your credit scores.
If the quote you get is not enough relief, then call the same number and then press 2 to connect to me and then we can talk about what negotiating balances lower will look like for you.
This is a process of elimination I want people who are current with bills, but struggling, to go through in order to determine which direction will work best for them given your current situation and near term goals.
Thank you for so generously answering questions!
I owe NFCU $16,000 on a CC. I have never missed a payment or even been late with one.
I have approximately $20,000 in other unsecured debt (other credit cards) and no secured debt.
I am 60 years old, ill with a heart condition, lost a leg, broke my neck, in a wheelchair and live on Social Security Disability Insurance.
My father-in-law owns this home and I am not on the (paid-off) deed.
My wife is not on any of my accounts nor I on hers.
Frankly I never expected to live this long and figured the debts would charge off upon my passing.
Apparently God, as he so often does, has other plans and I’m still kicking.
Now I find myself unable to continue this level of debt payment.
What should I do?
Contact them? To what end?
Stop paying for 6 months and try for a settlement?
File or bankruptcy?
As I understand it unsecured creditors have a difficult time garnishing SSDI, so one option is to stall and do nothing I suppose.
Any suggestions are greatly appreciated!
Edit to add:
I do have some limited cash on hand, perhaps $3,000 that I could put toward a settlement and could double that if I stop payments for 6 months before trying to settle.
The 6k would help to settle with Navy Federal, but what about the other accounts?
If you cannot continue to make the payment to NFCU and your other credit cards, it is just is what it is at this point. I can help you understand how thing will progress from here if you simply stop paying. You can give me a call at 800-939-8357, option 2 rings to me. I am out of the office tomorrow, but will be in Saturday.
I would highly recommend you speak with an experienced bankruptcy attorney in your area to get a feel for what that would look like. Read this article about looking for the right bankruptcy attorney first.
Michael,
I currently have a credit card with a balance of $21,000, a personal loan of $13,500 and auto loan of $27,000 all of which are with Navy Fed. Due to the child support put in place, I am unable to make even the minimum payment for all 3 loans. What would be the best approach for a debt settlement? I was originally thinking of continually paying the car loan and waiting until I reach a settlement with Navy Fed for the other two loans. Would you advise to do this path? Or would it not matter to be paying the auto loan? Any help would be greatly appreciated.
I moved your comment from the home page to this one that is dedicated to resolving debts with Navy Federal. Read through the main article regarding concerns with settling unsecured debts like credit cards with Navy Fed, while you have secured loans with them.
It would be a good idea for you to call in for consult. I will be able to dig into other details and help you identify a strategy to settle with Navy Federal.
Hello,
I just happen to stumble on this site. I have 2 joint accounts with NFCU. 1 is a credit card with a $9,000 balance which has always been on time. There is a vehicle loan over 6 months past due. The vehicle loan is for $43,000. I received correspondence with gave 4 options with the condition that the account would be settled because the debt has been declared a loss. 1) Pay $19,400 in 30 days. 2) Pay 24 consecutive months of $1,500. 3) Pay minimum payments of $875. 4) Pay 12 consecutive months $2,100. I wanted to seek your advice on what has been offered. It does state to call if I am unable to do any of the above. Thank you.
Call me at 800-939-8357, option 2. I do not charge for the consult. I want to dig into more details about your financial situation, and that of your co-borrower.
I am hit or miss starting today due to family in town and the holidays, but leave a message if I do not pick up and I will know to return the call.
Hi Michael!
I have about $50,000 in credit card debt with NFCU, on two separate credit cards (50 days late), 2 unsecured loans totaling about $4,000 (one 45 days and one 116 days late), and a car loan that I owe about $9,000 on. I am still able to pay my car loan, and the 2 unsecured. I need some advice on what I should or rather can do to settle this debt. I don’t have the money to settle anywhere near close to 50% or making my $500/month pay for each credit card. I lost my job a few months back, am now employed again but at about 50% of the pay and recently divorced. I filed bankruptcy 5 years ago so that is not an option for me either.
I want to be able to settle my debt and purchase a house within the next 3 years. Please provide me with ANY suggestions to get my credit back on track.
I have more questions about your goals and ability to raise the money you will need in order to settle with Navy Federal. I suggest you call me for a consult at 800-939-8357, option 2 rings to me. I am in through Wednesday but then out for the holiday weekend.
Is your car loan with Navy Federal?
My car loan is also through Navy Federal.
Call me Monday Wen. I can go over some of the implications of settling with Navy Federal when you have other accounts with them.
You can email me to set up a time that works for us to connect. My email address is the one you get these comment notices from.
Hi Michael –
I currently have about 25k in credit card debt with NFCU. I contacted them tonight and informed them that I am running low on cash, due to relocation expenses/tuition loan repayment refunding/new job. They didn’t seem very empathetic, even though I explained to them that I would like to meet my financial obligation (pay at least what’s owe, over time) but they had indicated only two options:
1- completely disclose my financial situation, submit an application for review by committee, and then if approved, have my APR lowered for 12 months (not completely eliminated) and I continue to make my payments
or
2- payment deferment but still under those conditions
I had inquired if it would be possible for me to just make my 1% minimum payment and not have any interest accrue; the woman said that is not possible since I am still required to pay the balance. I sort of corrected her in saying that I was trying to pay them back in full BUT it’s difficult when your interest accrues in perpetuity.
I suppose it might be that I have been a “good” borrower by still making my payments and haven’t been late once.
I am now seeking advice on what to do next. I definitely cannot continue making payments like this. I am completely short on cash. What are the “logical” steps that you would recommend for me to take? I have spoke with my family over the matter and they are considering helping me settle the debt. Obviously, nowhere near the amount that I am owed. I guess I am just asking in short: what are the actions (or lack of) that I must take to reach that point? Also, what are the possible legal (being sued, etc) or aggressive action (collection calls) that you see imminent? And last, what are the trending timelines to these events.
Please let me know and I look forward to hearing back from you.
Kind regards,
Jonathan
Are there other credit card bills, or unsecured debts other than with Navy Federal?
Do you have any other accounts with Navy Fed?
I would encourage you to call me for a consult at 800-939-8357, option 2 rings to me. Depending on the answers, and other details I will dig into, I may suggest a creative approach.
I have been offered 30% by NFCU to settle – around 9500 for a 31500 loan. I am accepting it. The only thing I want to know is should I request a change to the wording? Should I request my credit report say “Paid” or “Paid in full”? If it says something else, how is my credit report affected? Does it matter?
Thanks. I have found this site a great resource in helping me resolve this.
You can attach a copy of the letter to an email sent to the same address you get these comment notifications from Edward. That is my direct email address. I can review the letter from Navy Federal and offer my best feedback that way.
In general, when you are settling a debt that has been unpaid long enough, how the account is noted is not going to make the difference. It is the fact that the collection is resolved and a zero balance now owed that you are after.
Holding out for Navy Federal to show on your credit reports as paid in full is not productive or even necessary.
Michael, I have a NFCU visa with a balance of 21K, and a few signature loans with them as well in the amount of 6K, the signature loans are current but I have missed one payment on the cc, I just can’t make the min payment. What would be the best action to take to get the payments lowered?
What are the interest rates you are paying on each account Tina?
Hey Michael,
Reading most of you’re responses give me hope to a (HOPEFULLY) good outcome with Navy Federal.
I am completely in the hole with NFCU. Sadly they have time and time again tried their best to help me. However I lost my job back in 2013 & had been in and out of odd jobs since until 2015. I was pregnancy in 2014 and could not work due to pregnancy complications. All of this happened while I had 2 personal loans, and an auto loan with NFCU. It hurt me bad. Grant it I was in good standing until I lost my job and could barely pay my own rent. Unfortunately, I now have a repo & everything has been reported on my credit.
I guess what I’m trying to get to is I’m not at a fantastic job and making really good money. I just need to find the trust in NFCU. I want them back as a bank and I also would like to know how I would go about getting all my debt cleared up with them and how (if possible) would I get another chance for a car loan. I am a single mom and have 2 kids. I have been EVERYWHERE except auto masters for a vehicle. I have trust in them because my parents are military and have been with NFCU for so long. I just want them back!
Please help!!!
What are the balance owed on the unpaid loans and cards with NFCU?
How mush is owed on the deficiency balance after the repossession and auction of the car?
Hi Michael,
I currently have the following in credit card debt to NFCU:
1. $10,500 (Visa credit card, 6 months past due)
2. $16,000 (auto loan, 5 months past due)
3. $12,000 (was originally an auto loan but they converted it into a person loan due to title issues). This one doesn’t even show up in my online account anymore (perhaps it was sold off??)but a negative $3000 showed up in my savings account, so I’m not sure if the two are related).
4. $2100 (line of credit for checking, 4 1/2 months past due)
So I have about $40,600 in debt which I want to settle with NFCU for around 30 to 40% of the amount owed. In the meantime I only have about $5500 saved for that purpose. They’re calling my old job, relatives, etc. The car for the auto loan which is past due has an engine that needs to be replaced, so we’re debating whether it’s even worth trying to settle that particular debt. Plus, the car is collateral so I really don’t want to get it fixed just to have it repossessed. I’m also wary of making any type of payment to bring the accounts current since I would prefer to settle.
I had some medical issues over the past year which resulted in my not being able to keep up with the payments. I need to establish a dialogue with them soon and was wondering if you had any advice on how I might move forward. Thanks.
Give me a call so I can get into the details with you Paul. Situations like yours usually will benefit from a full phone consultation where I can learn more about your situation and goals, and you can hear more than just generalized feedback about navigating settling with NFCU one account at a time.
You can reach me at 800-939-8357, choose option 2.
I have approx $25,000 in unsecured credit card debt with NFCU. Also a personal loan for $1,000. I have been on time with payments for years, but I simply cannot keep up. I’m about to file for Chapter 7 Bankruptcy, but before I do, should I wait at least 180 days? Or, do you think that won’t make a difference?
I’m starting to realize that even with Bankruptcy, I will probably still owe them money, which may end up being garnished from my paychecks.
Do you have any thoughts on what that final owed amount may be after bankruptcy? I’m very worried it will end up being the same $500 I pay a month now. If that’s the case, there is no way I can pay it.
Thanks so much for your help!
Chapter 7 would not typically result in your continued payments to Navy Federal, but a chapter 13 would.
There are strategic reasons to wait to file a bankruptcy. Are you working with a bankruptcy attorney already? If you are, you should talk about the timing of when you will file with him/her.
If you are looking at a chapter 13, you may want to consider negotiating a lower payoff amount with Navy Federal instead.
Are your payments with NFCU current? If late, by how many months?
Are there other credit card related debts besides these 2 accounts?
Thanks for your response!
Yes, I have an attorney, but have not paid anything yet. I only went to the free 1/2 hour consultation. She recommended Chapter 7.
The total amount of credit card debt is $38,000. Most of it with NFCU, but I also have some retail credit cards I need to get rid of as well.
I am current on all accounts, but have a payment due next week to NFCU that I won’t be able to pay.
Thanks again!
You should not have to continue to make payments to Navy Federal, or any other credit cards, after the chapter 7 discharge. Your attorney will likely advise you to stop making any payments as of right now.
Thank you Mr. Bovee. You have been a great help to many!
have a personal loan for 17000 and a credit card for 13000 with NFCU both have been charged off but navy sends letters to settle for different amount but the letters doesn’t state that it will reflect the same on my credit report. I want to settle but I only can afford 350 a month on the most
Paying $350.00 a month is not really settling, and NFCU will generally not offer balance reduction if you need lengthy monthly payment plans.
Can you come up with any way to raise a lump sum amount of cash, say 1/3 of the balances? What about a third of just one balance?
Your lucky. I never got that!
Hello,
I have read your website with interest and am wondering if you could give advice on my situation.
I have a credit card at about 27.5 K and a loan at about 3.5 K. I had been making payments up until my SO left me and subsequently half our income. I was left with the mortgage and our child so money has been very tight. I would say I am currently at the 100 day mark for the cc and about 75 day mark for the loan.
I talked to NFCU at day 55 and explained the situation. They wanted about 24K to settle. I said I could not do that and have not answered their calls since.
During the call, I found out that they had contacted my ex, her family and even a girlfriend from over 15 years ago. While I understand they were looking for me, is this excessive? I am not even sure how they got in contact with my old gf as we never had our name on anything together and my NFCU account was opened well after we had gone our separate ways.
Also, I received a letter for my son yesterday indicating that they had taken money from his account to pay my loan. While I would think they wouldn’t do anything necessarily illegal, I have to ask, is that legal? It certainly seems unethical to me but then again, I do owe them money so I can’t really take the high road.
Anyway, any information you can give would be great. I may be able to get a loan from my family for about 25-30%. What are the odds of them accepting that?
Generally speaking, calls to friends and family must be for location purposes. The nature of the call – that they are collecting a debt – should not be brought up. Those fair debt collection laws apply primarily to third party debt collectors, and not an original creditor like NFCU. But NFCU and other lenders follow the FDCPA, and there are instances where an original creditor can be taken to task for violations.
I am assuming that they took money out of your sons account because you are on the account with your son at NFCU? This is unfortunately common with credit unions and the ability to do that can be found in their account agreements with you.
Settling with NFCU is common, but the amounts you are targeting may not be realistic. There may be more to your story that could help get them to make an exception. Call me for a consult at 800-939-8357, choose option 2, or email the same address you get this comment notification from and let me know a number and good time to reach you.
Hi, and thanks for your advice. I have learned a great deal from reading you here. My question is does cross collaterialization expire when the statue of limitations does on debt? At a credit union, I have delinquent credit card debt that is seven years old, deficit debt from a car that was returned and sold at auction at a loss, a paid off car loan and a mortgage that is current and never late.
The credit union will not release the title to the paid off car, due to other debt. I last asked them over a year ago. They have no interest in taking the car, it would seem. The credit card debt and debt from car that was sold at auction will come off my credit report in a few months. My question is, does all of that debt get rolled into my mortgage that will not be paid off for another ten years, or does it expire at some point. In addition, can the credit union keep the title to the paid off car indefinitely, or will I eventually get it. Thanks.
One more thing, as well. Does it make any sense at this point to try to negotiate a debt settlement on all of this debt that is almost seven years old, and will be removed from my credit reports in a few months.
It can make sense to settle debts that are passed the SOL to sue you, and even when the debts are no longer on your credit reports.
What are the amounts owed on the unpaid accounts?
What is the value of the paid off car that the credit union is holding the title for?
The value of the car is $10K. The credit card debt is $5K and I owe $3K for the negative equity for the car that I surrendered and was sold at auction. So, approximately $8K.
I spoke to the credit union on the phone about a year ago, inquiring about the release of the paid off car title. The collections manager asked me questions regarding the car and the value of the car that was paid off, and then he said we normally don’t settle debts for less, due to cross collaterialization. He then said it’s not really worth our efforts to seize a car ten years old to satisfy debt. So, I have basically let sleeping dogs remain sleeping and continue to drive and register the paid off car.
I really does not even bother me that I don’t have the title. I could care less. It is a second car, and I have no plans to sell it. I am wondering, however, if the full $8K will be added to my mortgage at the end of the period, or if the $8K will expire at some point. If that is the case, I can see that it is in my best interest to attempt to settle the debt now, as opposed to to later when it is added to my mortgage that I thought was paid in full. Thanks.
I do not see that happen with mortgages. I can get you connected with an experienced consumer debt attorney in your state if you like? I think that would be the better resource to address how your concern is handled in your state. What is the name of a nearby large city?
I live in Las Vegas, NV. Thanks for your comments, and I would welcome you recommendation for a consumer debt attorney.
I sent you an email with several experienced attorneys listed in no particular order. Please let me know how you progress with this.
Michael,
I have two loans with NFCU. 11,500 cc – currently in the 12th month of a payment plan with them on that – and a used car loan that is current.
Due to unexpected circumstances over the last 1 1/2 yrs, I have the cc debt to them and another 10k in unsecured cc debt about to be charged off from several other creditors. In looking ahead at my budget, I cannot continue to make the payment on the NFCU card either – which is likely to come out o the payment plan next month anyway, essentially doubling the payment. Currently trying to rearrange my budget priorities to make sure we can pay bills and eat long-term.
If I let that go, will it affect my car loan with them? I’m in Florida. Also thinking they could put a lien against my house for the cc debt if I ever sold it.
Thanks for any advice
-Craig
Credit Unions often have cross collateral clauses in their credit contracts. This means your car loan can be impacted. I would suggest scheduling a time to consult with me to talk about some strategy off line. You can fill in the consult request form, or reply to the same email address you get these comment notifications from and let me know some times and a number I can reach you.
Ok, sounds good. Thank you for the prompt response. I will fill out the consult form soon.
Hi Michael,
I’m in a bit of a jam. I have 3 accounts with Navy Federal and I am underwater and looking for a way out. I have 2 car loans and 1 credit card with Navy Fed. The first car loan I still owe $21K on. It was unsecured as I never sent them the title and they said they switched it to a personal loan rate and bumped the interest to 16%. I had an accident on that car over a year ago, the insurance company totaled it and paid me $30k and took the car. I have been paying Navy Fed $570 monthly for it ever since and they do not know it’s been totaled. The second car loan is still at $13.7k and I just got in an accident last week, without insurance. The car is pretty much totaled and might be worth $1,500 at the auction. I was upside down on that one anyway as the value was only $8k, but i still owe $13.7k. I could offer Navy Federal what remains of that car today. My credit card is unsecured and maxed out at $18k. Total I owe Navy Federal around $52K for all three. I have been putting all of my money into a startup company and have no money to continue paying them. My question is, what might happen if I give the totaled second car back to them and quit paying on everything? They might be able to get $1,500 at auction for my current totaled car but that’s it. I don’t have any other accounts with them. I am really wondering if there is any criminal legal ramifications? Please tell me your opinion on what might happen if I quit paying and walk away all together, as well as what might be my best option. I know not paying will affect my credit, but I won’t need anything credit related within the next 7 years. I would alos like to avoid filing bankruptcy… My dream would be to give them the totaled car back and walk away. Let them do a charge off on all 3 and that be that. My only fear is anything potentially criminal for walking away.
-Chris
We talked on the phone when you called in earlier Chris. Your comment will help me recall your situation. If you have follow up questions post them in this comment string.
I meant to clarify, the letter was very similar with the letter you suggested and I sent documentation to back it up. I have not received a response from them as of yet. I also have not yet been served, but I know that is only a matter of time.
Can I send you some information via E-Mail? I wrote a letter to the attorney last week and would like to E-Mail it to you.
Sure, use the email address you get these comment notifications from.
Is there any chance that they would negotiate getting rid of the late payments that are currently showing on my credit?
Probably not.
Getting them to drop the lawsuit is a long shot too, but worth the effort if you are confident you can still make the minimum payments. I am willing to help and see if I can take your story to a larger audience in order to bring some attention to the rapid fire phone calls original creditors use, spread awareness of why cease communication requests have a limited applicability, and hopefully see a creditor or 5000 change their internal policies about at least responding to cease communication notices (as is allowed) with an “okay, but just so you know, this is how we roll from here” letter of their own.
Would you agree to an interview?
Hi,
I have read through all of the posts and I have a very different situation with NFCU. I have a credit card debt that I have been paying on since 2005 from a home remodel (My EX’s Previous home). Original balance of $15,000 and now a balance of $11,000. I was a stay at home Mom and now divorced with 4 children. I have 3 children who would need daycare if I chose to enter the work force at this time. I chose to use this time to work on my degree via online classes. I am currently enrolled as a full time student. My only income is child support. I was awarded sole use and possession of marital home (my name is not on the mortgage), but I am also responsible for payment. My child support covers the mortgage and that is all. I had never made a late payment $250 monthly to NFCU. I called them during divorce and requested a modification to which they did lower to $140. I continued making all of those payments on time. At the end of the year, the payment amount jumped back to $250. I called them and requested modification again to which I was told it was a one time deal and they would not do it again, they wanted their $250. I began making the $250 payments again and in the mean time, my mortgage started falling behind because I could not possibly pay both. In January I decided to pay them what I could pay them even though it wasn’t the full amount. I sent them $150 in January after they started harassing me, 5 documented phone calls in one hour to my cell phone DURING an exam, I E-mailed them at that point and told them they were not to contact me by phone anymore due to the law, so they did stop calling. $200 in February, $150 in March and in mid March I received a letter from an attorney in my state (FL) saying that I was being sued. They have never offered me any settlements agreements. The attorney has already filed suit with my county court house. I consulted an attorney who says I am a “Prime Candidate” for Chapter 7. I do not want to file a Chapter 7. I would be able to continue payments of $150 or maybe even $200 a month if they would work with me on it. They have made no effort to negotiate with me in any way. I have no assets. There is no equity in my home, probably negative equity if anything (and my name isn’t on the mortgage, but is on the deed). I have a vehicle with a balance at a credit union of $2,100 and NADA value on that vehicle is $2,000. I do not have anything. I do not understand why they are coming after me with a vengeance? The attorney that I consulted said that they do not know that I don’t have anything or they would not be coming after me. To make matters more difficult, I am trying to purchase a much less expensive home ($50,000 price range). I owe $155,000 on my current home. If I could get in to a much smaller mortgage, I could afford to make my payments to NFCU with no issues. But, now they are reporting on my credit 60 days late for the last two months which has dropped my score and put me right out of the home contract that I was trying to purchase. I am not sure what to do at this point. I want to pay the debt. I do not want to file bankruptcy. But, they are making it impossible for me to obtain a lesser home mortgage by posting 60 day late payments on my credit. I made payments, they were not late, they just weren’t the full amount. I don’t even know what to do from here. Going to work is not an option at this point, daycare costs for three would be more than I would make in a month. I am extremely frugal and resourceful. It seems like all of the normal steps in the process were skipped over on me, I do not understand why. I truly don’t own anything to give them. My auto loan is $120 and I have kept it current. I have another credit card with a $60 payment and I have kept it current. I thought I was showing good faith by sending them what I could, but it is still showing late payments on my credit. How can I fix this? I need to be able to obtain this lesser mortgage before I lose the home I am in.
The likeliest reason NFCU skipped to immediately suing you is because:
1. You were not paying the required minimum payment.
2. You told them not to contact you anymore (even if only by phone). They interpreted that as a cease communication request, which leaves suing you in court as the only option to collect.
I see number 2 play out with creditors for a couple decades now. Cease communication letters should generally be reserved for when the statute of limitations for a creditor to sue you have passed.
Bankruptcy may impair your ability to get student loans, so I do not like that idea. But for starters, what is the total of all your unsecured debts? And do you anticipate applying for student loans in the next couple years?
You have options, but none of them are great.
I really do wish NFCU and other creditors would explain to people those temporary hardship plans are only good for a limited time AND that they are often precluded from extending them to you again. Consolidating credit card bills into one lower payment for the life of the balance with a credit counselor is often the better path with some banks.
What chance is there for you to bring your account completely current?
Thank you for your response.
I can bring the account current (It shows $836.00 behind) by pulling from a few small accounts, it will take everything I have, but I can do it now. I just wasn’t sure that would help me at this point. I actually tried to do this on-line a few days ago and they have my account locked, so I will have to go in to a branch and didn’t know if they would take payment from me being that an attorney has it. Although they have continued cashing all of my checks every month. If I do pay it to current now, will it stop the legal process?
I have unsecured debt:
NFCU $11,000
CC$ 1,800
Student Loans $3,500 (No payments due at this time)
I won’t be applying for any more student loans as I qualify for FASFA and it does not have to be repaid. But, I really need to qualify for a mortgage to get out of this high payments here or my situation is just going to continue to be financially difficult.
I would not bring the account current without first talking everything over with NFCU and the attorney they have the account with. I would probably first put a concise letter together about what you did and why, and that you can bring the account current and make normal payments, and would they please consider dropping the lawsuit.
I would be all “As a single mother with 3 small children, the day my phone rang five times in an hour (the month I paid only what I could afford), I was in the middle of an at home college exam. One of my children was exceptionally fussy this day. The NFCU calls that came in rapid fire, along with the stress of the day, and exam, all conspired to frustrate me to do an admittedly too quick online search on how to stop collection calls, which resulted in the hastily sent email requesting NFCU stop calling. It has never been my intention not to pay. This is further evidenced by my willingness (and considerable struggle) to bring the account current….”
You get where I am going with this. The goal is to get the suit dropped.
Is that the direction you want to try to go? Otherwise bankruptcy would get rid of the two credit cards for probably less than 1800 dollars total.
Oh, and bankruptcy typically takes you out of the home loan market for roughly 2 years.
Hi,
We had an NFCU credit card with a 5k limit. Crap happened and we defaulted that was like 5 years ago. We are in a better place now and want to fix our credit. I’d like to call them and settle at 50% and pay it all now but I don’t know what phone number to call to take care of this. We haven’t heard from them in a few years so I have to call them. Does anyone know what number I should call? Also I’m not concerned with maintaining my acct there, I just need a letter stating the debt had been satisfied.
What state are you in?
The main customer service line for NFCU is (888) 842-6328, and will do to get started.
If you have your old account number handy, give the rep that, or your social security number. Explain very briefly that you are calling to resolve a really old debt that went to collections. You will get connected to another department, and should be prepared to repeat yourself. You may get transferred again, as the first department may not handle accounts that are past a certain age of nonpayment.
Hello,
I have a nfcu credit card I opened in 2012 and limits kept increasing til it hit 11k and currently maxed out. I’m two weeks behind on the payment but my concern is I have a car loan I opened in September 2013 and am up to date in it for 10.5k. I’ve read over the promissory note on the car loan and it says nothing about cross colateralization…I took a 30% hit on income coming into 2015 so defaulting the credit card is a real possibility, I attempted refinancing the car elsewhere but no luck do to my credit hit on maxing out the card. What are my best options? I don’t want to pay the car off to find out the bank won’t release it. Any help would be appreciated. Thanks.
What is your interest rate on the credit card right now? How much is your monthly budget short of being able to make timely payments on your NFCU credit card? What are the balances on other unsecured debts that you carrying?
Interest rate is 17.9 (ceiling for nfcu). Tried to lower it 6 months ago and denied. I can make the payments when I get caught up on everything within 30 days but until then necessities come first and cc bill is the first to go. By the time I get caught up on priorities the cc bill will be too much to catch up and be in default more than likely. That is my only unsecured debt aside from a $150 Kohls card. My worry is if I can’t catch up on the nfcu card will it affect my car loan with nfcu even though it says nothing on the promissory note. Also what options or action should I take with the cc if I can’t catch up?
If you can afford 200 dollars a month, I would suggest calling my hotline at 800-939-8357 and choosing option 1 to talk with a counselor about enrolling in a debt management plan. If you cannot afford the 200 now, but think you will be able to in a month or two, you could still get into the fixed lower monthly repayment plan then.
Does that sound possible?
I have an old credit card from NFCU that I didn’t pay. Lost my job, that whole story. I’m now in a position to make good on my debt as I’ve had a full-time job for over 6 months, but it is on my report with ASSET ACCEPTANCE LLC as well. The status of the account says Past Due 180 days, not charged off or sold. Would I have any luck dealing directly with NFCU to get the collection removed? I can pay the entire balance due of $4300.
Asset Acceptance is a debt buyer. You may want to call NFCU and verify that what they are showing on your credit reports is accurate. Post what you learn and lets go from there.
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I should point out the significance of NFCU having sold your debt to Asset Acceptance.
Navy Federal should show a zero balance owed to them once they sell the debt. So the accurate credit reporting is important so that you are not having to negatives on yoru credit report showing a balance owed for the same debt.
Once that issue is corrected, you can then tackle the debt with the debt buyer, and get it to show zero balance owed. Your credit reports can recover better from there. There is next to no chance you can get the collection removed through NFCU.
I verified with NFCU that it was in fact sold to Asset Acceptance. I initiated disputes for all my collections accounts in February and did not hear back from Asset Acceptance at all regarding their past due balance of $5000, the original debt was $4300. I'm in Nevada & I'm not sure whether or not they can sue me since I didn't get any letters from them after my dispute. This dates back to May 2012. I think the original date was January 2011
Were your disputes credit report related, or did you send Asset Acceptance a specific dispute?
Nevada has a 4 year SOL to legitimately sue on revolving consumer debts like your NFCU credit card, so it appears you are out of the woods as far as a legitimate collection suit goes.
Do you have any specific credit or finance goals in the next 3 years?
I would like to buy a house and in order to do so, all collections have to be paid. I tried calling them today and they transferred me to a line that doesn’t answer. So, I’m thinking I’ll just sent them a letter offering a settlement since I can’t get anyone on the phone.
I would not send them anything in writing acknowledging the debt. Nevada is a state that allows reaging of the debt to occur when in writing. That could (I am not saying would) reset the SOL for you to be legitimately sued in Nevada. You should run this concern by an experienced consumer law attorney (one with debt collection defense as part of their practice).
If you need help settling you can get some, just let me know.
I would appreciate help settling. Thank you Michael.
Okay, I am going to forward your email to one of the experts I work with and you two can connect for a consult on the phone and take things from there. You can expect an email from me introducing the two of you to each other.
….if/when they call again, I will politely tell them the same thing. But how should I respond to any written notice (if at all….unless it is from an instate lawyer)?
I am not sure I would respond to the average collection letter at this point. Not given the set of circumstances you are in (other readers should know that responding to collection letters using certain tactics is really appropriate sometimes).
Greetings Michael,
I had 2 credit cards and a personal line of credit (8K, 7K & 1.5K respectively) with Navy Federal Credit Union that were all charged off in late 2010. At that time, I explained to a CSR in the NFCU collections department that I was unemployed, about to go onto social security (62 years old) and had no assets. Consequently, I could not afford even a token good faith payment.
Since that time (almost 5 years), I have not heard a peep from NFCU. My credit situation has, however, improved somewhat (675+ FICO) and I have managed to acquire a few low limit credit cards and a couple of store/gas cards with an aggregate credit limit of approx. 8K. However, I am still unemployed and on social security. My only asset is clear title to an 8K used car.
I am amazed that I have not heard from NFCU, OR that they have not sold this debt to a collection agency, OR assigned it to an attorney. I find it difficult to believe that NFCU would just “forget” about a 16.5K obligation for going on 5 years.
What is your assessment as to why I have not heard from NFCU? Also, do you think that my improving credit situation might trigger some “collection scoring model” showing a potential ability to repay the debt, and thus, subject me to being sued prior to the statute of limitations?
Sincere appreciation for your consideration of my dilemma.
What state are you in?
NFCU may have flagged your file as noncollectable. That can prevent your accounts from being dropped in to the general collection pipeline. But it is odd that they have not checked up periodically with some collection calls, especially given the fact that you have had new credit accounts showing up on your credit reports.
Wow….such a quick response! Thank you!
I am in Massachusetts. I have moved twice in the last 5 years (within the state). My new credit activity has mostly occurred within the past 2 years.
If they do sue me, is my car/personal effects exempt from judgment (forgot to mention that I have $5k in savings)?
Many thanks…
You are not out of the woods yet to be sued for the Navy Federal accounts (6 year limitation for legitimate collections action in the courts in MA).
Massachusetts protects (from judgment creditors) 85% of wages; $7,500.00 value in your car; $125,000.00 value in your home (up to 500k if your declaration of homestead is recorded); $15,000.00 value in household/personal items; $2,500.00 cash in your bank account.
You should have ample warning that any of those risks loom large by the fact you have been sued.
I am not shocked that you have not heard anything about the debts from NFCU or a collection agency working for them. It can happen. No need to go poking a sleeping bear either. Perhaps it is better to have a wait and see reactionary response if something comes up between now and the SOL to sue in MA expires?
….again…Thank You for your help and patient responses.
Follow-up question. I have 3 open collection accounts which are relatively small from a couple of years ago ($1600, $600 & $500). I get occasional letters/calls from the CA’s on theses accounts (all charged off) and I am tempted to attempt to settle them, before they escalate to legal action. My thought is that (once the CA’s realize that I have only SS income, which is exempt, and no attachable assets)…..perhaps these could be settled for a “song”.
Question is….if doing so might be “poking a stick at a sleeping bear” aka….NFCU and my $16.5K debt with them???
….your thoughts?
You can use the search box in the upper right corner at the top of this page and enter each debt collectors name. I have likely covered them on the site. You can read what the general settlement targets are for each. If I have not covered a specific debt collector that you can find, post a new question about then here: https://consumerrecoverynetwork.com/ask-a-question/ and I will put up a new page with what I know about them.
As far as the whether your strategy to settle non NFCU debts is taking a poke at NFCU, I think that is possible.
What are your finance and credit goals between now and when these accounts cross over the SOL to be sued?
My primary goal is NOT to “wake-up the bear” (Navy Federal) to the extent that is possible, and just hope that my luck holds out until statute of limitations kicks in.
My secondary goal is not to get sued by Calvary over a $1600 Cap1 charge-off.
I guess I should wait and see if Calvary assigns this to an attorney in my state. And only then attempt to negotiate a settlement? Or should I preempt that by
attempting to settle now? I am seeing a lot of folks on this forum being sued by Cap1 over amounts less than what I owe.
Is Calvary calling and writing more recently? Are they reaching out directly or working through a collection agency?
Calvary (thus far, at least) only sends me a “form letter/settlement deal offer” once a month or so. The letter says that, “I have been approved for a settlement offer of a 30% reduction of my debt”. I have yet to receive any phone contact from them.
I have a growing concern that if my credit report begins to show that I am starting to pay off some of these small collection accounts……NFCU will “awaken”. Paying these small collection accounts would be a real hardship for me, but I could never pay NFCU.
Paid or unpaid, these collection accounts are beginning to age on my credit reports, thus mitigating their effect on my score. Consequently, my only real concern (other than waking up NFCU) is trying to avoid being sued.
In the final analysis, I am “judgment proof”. I have only social security as income, live in subsidized senior housing and have no assets to attach. Big question…..does it serve my cause to call/write Calvary and tell them my situation (in hopes of pre-empting an assignment of my debt to an in-state attorney)? Perhaps they might “move on” and direct their efforts toward someone who is actually “collectible”.
You are in good shape to weather anything that comes up, and that goes for Navy Federal as well as the debt collection agencies. Nothing like a free hassle though, so perhaps avoiding making any moves on any of the accounts until the SOL passes is the better move for your credit reports.
Thanks Again, Michael….
Thought you might be interested in the following contact that I had with Calvary over the telephone today (they called me…totally coincidental to my postings on your website this weekend).
A disarmingly pleasant lady confirmed my info and identified herself as a debt collector for Calvary and was attempting to collect on my debt owed to Capital One ($1600). I confirmed who I was, acknowledged the debt and told her that my only income was Social Security. I further explained that I was living in a subsidized senior living facility and had no appreciable assets. She said she was sorry to hear that and would note my file. She wished me luck and asked me to contact her if my circumstances changed in the future. Based upon my conversation with her, I am now somewhat hopeful that this issue may not be escalated to an instate attorney for legal action (at least for the immediate future). Your thoughts…?
I think they may just play nice, like some debt collectors actually will do in situations like this. I would expect them to call and send a collection notice in the future though.
Hi sir, well where to start? I have 3 accounts with NFCU. A car loan, 25k owed, another one, about paid off, but about 200.00 owed and the biggy, a Visa, 22k owed. I had a payment plan for the Visa in the past, I was fresh off of a divorce, etc, so I had it for a year or so. I was not supposed to open anymore credit cards as part of the agreement. Well I went out on a medical disability from work July 2014, (cancer) and have not been back to work. I started collecting LTD, (long term disability), which was 60% of my regular check, so Christmas started to come about, not making enough money, I opened some other cards, nothing major, a few hundered here and there. Well Dec 2014 my payment plan with them ended and they would not renew, because of the new credit. So my payment went from 220 approx month to 450 approx month. With 60% of what I was making its been very very very difficult to make this payment. I’ve been doing so, and I was never late with my previous payment plan with them, however now I am about to not afford to continue to do it. They don’t seem to really care of my medical/financial problems or anything. I’ve tried to do debt management with exterenal companies, and its not bad, it really cuts down on how long I would be paying on the CC however the payment is the same, so its not helping short term. And I know they at NFCU can cross collateralize my car payment with them. I really don’t want to ignore them and I can afford the 220 or so a month with them, but the 550.00 is too much of a strain in my current situation. Any suggestions?
When you say you are working with a debt management company do you mean a nonprofit credit counselor? Are there other accounts in the debt management program other than your NFCU credit card?
Do you have a mortgage?
How much do you need the car that you still owe 25k on?
I am not currently working with a DM company, I had contacted several, both for profit and non profit. The problem with any of them is they were indeed cutting down the time for paying but the payment was about same and in my current situation that didn’t help…..and no only my Visa WAS in the debt management program, (but no longer in the program for reasons stated above)…..I do have a mortgage, not behind on it and well I do have a pickup paid for but we need the Soul though, yes.
I am wondering about additional debt in order to get a better picture of what bankruptcy might look like for you, or whether monthly payment relief on your other bills might help make a debt management plan more affordable.
With the fairly dramatic drop in income, and the need to shave off some of the obligations, it could make bankruptcy a good financial decision.
You can reconfirm the car and home loans in a bankruptcy, which can allow you to keep the property as long as you continue to pay. Your states bankruptcy exemptions will play a role in this.
Settling the NFCU credit card is possible, but it is highly likely the car loan will cloud the issue. Bankruptcy would prevent that.
Have you consulted with anyone about bankruptcy yet?
No I have not contacted anyone about that yet sir.
I would encourage you to make that part of your due diligence in determining your next step.
You can connect to a bankruptcy resource and have an initial no cost consultation at 800-939-8357, choose option 3, and you can also search for one near you on http://www.nacba.org.
To follow up, I suppose it doesn’t matter if my income is disability, LTD? I’ve been out of work since last July for medical reasons. Just wondering.
It matters to some e.g. Midland Funding is a large debt collector who pledges to cease collection efforts from the uncollectable. LVNV Funding is another, but they do not publish that as openly as Midland. There are others.
ok, but what about NFCU? all of my income is LTD which is 60% of what I was making while working.
Banks tend to not offer a reduced monthly payment plan to anyone recently on one in the last 12 months, and in some cases, at all once you drop out of a debt management plan with a credit counseling agency, or drop an internal hardship plan.
If you cannot carry the payments until 12 months goes by (since you dropped off the DMP), I do not thing NFCU will put a pause on any of their collection policies in the near term. That would leave looking at how you can pull together money to settle, or bankruptcy as a means to discharge the debt in a chapter 7, or force NFCU to take the payment the trustee tells them they will get in a chapter 13 (I usually prefer folks look at negotiating settlements instead of chapter 13 where possible).
My comment about the debt collectors above was out of context. I did not reread our comment string before posting that, but I did before posting this reply.
So, I have an unusual issue. I am currently working on correcting small aspects of my credit score to make the process of buying a home easier. As such, I recently signed up to Credit Karma’s website and immediately noticed a $1, 100 balance due for a NFCU credit card ($1, 000 limit) so it is affecting my card utilization rating. The issue: I did not open this card, nor charge the item(s) on said card. When I was eighteen years old, I had a brief marriage to a member of the Navy and he obviously opened some type of joint account without my knowledge. We have been divorced for seven years…how do I settle this debt, if I am unable to prove I did not accrue it? And if I settle it with NFCU will it still negatively affect my credit score, or am I stuck paying off the $1, 100, in order to move forward in the best possible way?
How old is the charge off that Navy Federal credit card is showing on your credit reports? If it is close to as old as when you got divorced, it may be deleted soon due to age.
If it is only a couple years old, I would look to dispute the account with Navy Federal, and with the credit bureaus, as “not mine”.
Settling an account that you got no benefit from, nor even opened, is a last resort. It can make sense when you have other financial goals that are being held up, and more so when the balances at issue are relatively low.
What time frame are you looking at for shopping a mortgage?
I have (had) an account with Navy Federal for many years. I have enjoyed working with them and would use NFCU as my only financial institution if I lived anywhere near a branch.
But I have had to go through a chapter 13 bankruptcy where I had to name them in the list of creditors. The reason for the bankruptcy was that my building maintenance job was outsourced and the new company felt that Wyoming was “too small” to employ a person in (irony and sarcasm intended).
The bankruptcy is cleared now but NFCU sold the $2000 debt I had and now claims that I caused them to loose money. I paid the debt, I never asked NFCU to sell the debt or take a loss, my problem was with a different bank.
But I am permanently shut out of my account except for checks and in person visits. Also when I call in I keep getting told that my account (all my accounts) were sold off. How is that possible?
So why am I being permanently punished for NFCU’s actions?
Did you complete the Chapter 13, and I mean make the 3 or 5 years of payments?
The repay was supposed to take 5 years and only took 3.5. Paid in full.
Bank policies can be set up to heavily bias against anyone who has defaulted on payments, discharged debts, or otherwise not fully met account obligations. I know that you paid fully through the bankruptcy trustee, but if took a guess, Navy Federal does not distinguish between the fact that your file is tagged for bankruptcy, and the full repayment.
I would call NFCU corporate and ask their policy on this. They like to advertise how they are there for military families, but are they under the assumption that military families do not hit tough financial spots? They are sorely mistaken. But then again, they have policies and procedures that try to do too much. That is not an issue exclusive to NFCU. It is an issue with virtually all banks.
In the end, you may determine to take your business elsewhere.
I let NF know that 40% is the bottom number I can possibly do pending going to family and friends. I also stated I an working with other creditors settling and I am close to an agreement so whoever settles first will get paid first. I also told them I will go as far as consulting with a bk attorney. So I will see what they come back with soon.
Is 40% typical for NF settlement? Or have you seen lower percentages?
I see them get stuck at 50 percent, but my targets tend to be 40. NFCU, like other credit card issuers, can look to settle at different rates of savings depending on a host of different inputs.
If they refuse to budge of the 50 percent settlement, can you swing it?
I did speak to NFCU today. She offered i 50% of balances. I countered at 35% and she said she couldn’t submit an offer that low. So I said I will try and reach out to family and friends at 40% and that’s the furthest I can go. I’m waiting to hear back.
I would follow up if you have not heard anything within a week, and certainly a couple weeks before your accounts go 180 days late.
I have my mortgage through NFCU and a credit card owing $28k. I am considering settling some of our other debts held outside NFCU (totaling over $70k), but am concerned about this particular debt due to the cross-collateralization. Will NFCU settle that without affecting our home, or should I transfer the balance to a different creditor and then try to settle? If so, how long do I need to make payments on the new account before attempting to settle? Thanks.
I would just as soon refinance my mortgage with a different lender, than balance transfer the 28k over to some other card(s), if you even can, and then pay for a year or more before later trying to settle.
That way would be potentially less of a complication.
How does that scenario look for you?
Michael,
I am in a very similar situation to Jason. I have $19,400 in credit card debt with NFCU. I also have a VA loan through them for our mortgage. I am switching jobs soon, and the overtime will be gone for about a year at which time there will then be plenty of overtime. Changing jobs is the best option for my family in the long-term, but in the short term, I will have to default on the NFCU credit card to be able to survive. My question for you is, if I just stop paying on the CC for the next year (maybe giving them a couple hundred dollar here and there), will it affect my mortgage? I plan on paying this CC debt off completely, but i just need time to get to that point. Thank you for your time and consideration.
-Steve
You will be okay on the mortgage side, but just to be sure, call Navy Federal and ask about their policy with what you have coming. Post what they say and lets go from there.
NFCU will offer hardship payments on the credit card withing a month or so of being late. That may open up some options to keep this out of collections, or otherwise stagger your delinquency a bit.
At the end of the day, if you are going to fall 6 or months behind, I would settle for the best savings (and payment terms on the settlement), because that may then be the best outcome for your family finances.
I have an unpaid unsecured “home improvement” loan from Navy Federal Credit Union for $50,000 with an 18% interest rate. I obtained this loan about 2 years ago and was making payments on time for about a year until my family and I fell into hard times. My wife became mentally ill and had to stop working. We began to receive some money from disability insurance. (half of her income). We continued to make the payments, as we continued to scrape by. After about a year, the disability insurance payments stopped and we were left with a single income. So we were forced to stop making payments to keep food on the table. We have settled with other accounts, before they charged off, but the NFCU account is too much to settle with. This account is about to be charged off. What should I expect to be the next step. I can not afford to pay for this loan. What are my choices / rights (if any) The account is now about 55k. (Fees and penalties)
Are you certain the home improvement loan is unsecured? If it is, you are looking at the same types of concerns you read about above, and in the comments.
How much equity would you estimate you have in the home right now?
What state are you in?
I live in CA and I had contacted Navy several months ago and they called it a signature loan. With this increasing amount, are the chances of getting sued greater than not? I don’t know what to do or what to expect. They recently asked for me to send them a letter indicating an amount I could afford for them to consider a settlement amount, but I think its a ploy to restart the SOL. I really wish I could pay them off and put this behind my family and I.
You do not have to send a written offer to settle a debt with NFCU in order to reach an affordable agreement. You can do that over the phone. I would not say they are trying to get you to reset the SOL to sue. Navy Federal internal collection policies are just not that well thought out. But your think of that stuff means you stay on your toes, which is a good thing with this king of stuff.
Your chances of being sued are pretty good.
Could you afford a monthly payment at zero percent interest?
If you were to settle this account later on, how long would it take to pull together 30 to 40 percent of the balance owed?
Would it be better to try to settle with NFCU before they sue me or wait until or if they do sue? What are the best chances of getting a lower % rate?.
Is it unheard of getting a settlement with zero % interest?
At the current time, I don’t have an approximate time line as to how long it would take me to pull together 30 or 40 percent because we are living paycheck to paycheck, so I really don’t have a choice at the present time.
Settlements that require payment plans, that have zero interest, are fairly common.
When your choices are food on the table vs settling a credit card bill, the choice is being made for you. Settling should first be based on your ability to pay.
You will have options to consider all along the way. It might be a good idea to talk with a bankruptcy attorney to learn how that can help you later if push comes to shove.
I had a checking and savings account last year that was closed after i failed to pay my overdrafts. Do you think they would allow me to reopen my checking account with them so that i could open a secured credit card with them or would i be better off going elsewhere? I am willing to pay off whatever debt i owe them.
Call the bank and ask about their policy for opening accounts with customers with prior overdrafts and closed accounts. Some banks are open to doing this.
Even if you go somewhere else, you may not be approved for an account due to the past account issues with another bank. Paying off the past overdrafts will increase your chances.
I have an unpaid credit card from Navy Federal. The total balance owed is $4000 and I had a medical emergency in summer of 2013 and after trying to maintain the payments and falling behind 30days apx. 2 times I found out that before the medical happened and I had ever had a late payment, the visa was closed due to lack of activity, because I was trying to pay down the balance and not use it! after fighting with them to re-open the visa and not delete the oldest trade history I had, I was no longer able to keep up with it, (and ethically did not want to because they had already affected my credit score by closing it) and stopped payment in March of 2014. This morning I was served with a summons to appear/repay. Now I have researched this situation previously with many comments of Navy Federal doing everything in their power to scare you into paying. Do I have any options of settling this or is this a scare tactic and if I were to ignore it what would the repercussions be? Also, my fiancée was active duty and has a collection from Navy Federal that was reported finally in 2011 after stopping payment in 2007, he has since had auto loans and other services and states the same thing was done to him but has never had any further action against him. Should I take the loss and ignore or will there be further action?
You can probably still settle your credit card with Navy Federal, but the amount you can realistically expect to settle for is often going be higher now, than if you had not been sued.
As far as Navy Fed scaring you into paying, I suppose the debt collection process can be viewed that way. It is really just the collection process. Some people get sued, some people don’t.
If they get a judgment, they can potentially look to garnish your wages, levy or freeze up your bank account, or lien property. Those are not scare tactics either, just how collection works if they get a judgment, which can now happen since they sued you. That is basically what you need to be concerned with if you ignore this.
If you were to try to negotiate a settlement, what amount of money would you be able to pull together, and how quickly?
I just wouldn’t expect that a balance of $4000 would create such a large legal action. If I was able to settle any amount it would probably only be for $1-2k. I am 25 with no assets and working paycheck to paycheck supporting myself. and I know everyone has a sob story but I just don’t see myself being able to repay in full. They also never sent any notices of settlement like some of the previous comments I ready today. Is there a way to fight the judgment or delay the process?
I see collection lawsuits filed for less than 500 dollars regularly.
You can definitely fight the lawsuit, and you may even be able to get it dismissed. At a minimum you can fight and buy yourself many months of time.
Post the name of a nearby larger city and I will email you contact details for any experienced debt collection defense attorneys I know of in the are that offer a no cost initial consult.
I live in San Diego,CA. And thank you for all of the advice. It is so helpful.
A default judgement was awarded to Navy Federal Credit Union for approximately $43,000 in credit card debt in Sept of 2008. I was just notified by my employer that my Navy Federal has garnished my wages for 25% starting Jan 23. The toal on the garnishment order is now $70,547. I found out about the judgement in 2010 when I sold my house on a short sale an attorney for Navy Federal put a Lien on the property preventing the sale. I was recieveing no cash from the sale and the buyer agreed to pay the attorney a nominal amout of $2,500 to remove the lien. Unfortuneatley I have know about the judgement since 2010 but have never done anything about it. I am now considering contacting an attorney regarding vacating the judgement since I was never served for the original law suit. I do not believe a bankruptcy will work for me.
What would be the best way to negotiate a settlement with Navy Federal to remove the judgement and wage garnishement? Should I try to negotiate with NFCU and or their attorney myself or hire an attorney to negotiate on my behalf? Thank you
Now that there is a garnishment, unless you can show how you meet exemptions for your state, the attorney for NFCU is believes they have all the leverage, and that is true. The garnishment will typically not go away unless you leave the job, can show how the amount they are allowed to take causes undo hardship on your family, you settle with a lump sum, or combat the situation.
What sort of reasons can you bring up to the court to show that the garnishment will cause you to not meet your basic bills and living expenses?
Can you come up with 75% to settle if you cannot get the garnishment reduced or eliminated?
Why is it you believe bankruptcy will not work for you? What state are you in?
If it were me, my first step would be to contact an attorney with a consumer law practice. But not just general consumer law, one who regularly defense consumers in debt collection cases. I can help you locate one with experience that offers a no cost initial consult if you like. Just post the name of a nearby larger city.
Vacating a judgment when you have good challenges to raise is the first thing I would talk to the attorney about. If that is not a reasonable goal, settling in this instance may be better handled by the attorney than on your own.
Hey there.
So to start, I am current on all my bills.
I have the following:
Nfcu cc: 10,500
NFCU Auto: 19,100 (upside down by about 7,000)
NFCU consol. Loan: 15,100
Chase: 5400.
I want to consolidate or offer settlements. How should I approach. I’ll have about 9,000 to spare/offer in cash.
Thanks.
Can you afford a monthly payment of roughly 590 dollars for all of the bills aside from the auto loan with NFCU? How much is the car payment?
Is your current income something you consider stable?
Yes I can. The auto loan alone is 425 a month the consol loan is 425. Credit card is 200 and chase I pay about 200 a month. What is best course
You appear to be in the position to consider all legitimate options to get out of debt. The most common by far would be to aggressively pay down the debts in an accelerated manner, like the debt snowball method.
You could also benefit from talking to a credit counselor about a managed repayment plan, which is what I had in mind when I asked you those monthly affordability questions. You can talk to a counselor at 888-317-8770 (I do not think they are in tomorrow – Sunday).
The debt snowball or roll up method I mentioned first will keep your credit scored and financing options in tact.
The managed repayment plan through a credit counselor will leave your credit scores untouched for the most part.
You appear to have an interest in settling your debts. But I do not like this option with all of these NFCU accounts when it is not out of necessity. You will likely need roughly six thousand more dollars than what you have now to be prepared to settle the credit cards and loan. That does not account for the car loan which can often have a cross collateral condition that could impact your ability to keep it if you stop paying your credit cards and loan with NFCU.
If you can qualify for chapter 7 bankruptcy, you could be out from under all of these debts, including giving up the underwater car, and with no concern for any deficiency balance after the car is auctioned. You may have other assets that you do not want to be affected by a bankruptcy, or a host of reasons to want to avoid it.
Out of these, which would you be more inclined to pursue?
Well due to my position and clearance I am more inclined to speak to a counselor through military one source and get an idea, but the debt snowball looks like the route otherwise. I’d prefer to avoid bankruptcy all together . Would you recommend taking the 9 I have in Cash and paying off the lower credit card and then rolling those payments. Or would you recommend putting that 9 in an acct to make the accelerate payment towards one card and then taking my usual income and payments and making accelerated towards another debt. That way if an emergency were to arise, I’d have a little cushion rather that having to use a credit card.
Again thank you
My preference would be to keep some powder dry for surprise expenses or an emergency. How much of that cash in reserve is the right amount for you is a question you have to answer. Lets assume you took 5k and used it to pay down an account. What are the interest rates on all of the loans?
Michael,
I posted on Jan 5 2015.
No i have not contacted a bankruptcy lawyer yet.
You did not say when they send the accounts to charge off nor when they sue.
It’s been 4 months since the loans were initiated.
How much time would i have till they sue pls?
And do they sue on all high debts accounts?
Thanks
Signature loans traditionally charge off at 120 days of nonpayment.
Credit cards traditionally charge off at 180 days, though some banks appear to be moving to more of the 4 month timeline.
Creditors can charge accounts off much soon than the above timelines, but accounting principles, and bank regulator guidance, does not want to see charge off timelines going beyond what I have posted (though the OCC uses a 7 zero billings cycle that could appear to leave room for 210 days).
My experiences show that creditor risks of suing to collect begin predominately right at charge off. But there are creditor policies I can point to in the past,and even now, where placement with attorney collectors with known reputations for filing collection lawsuits, can occur within the first several months of payment delinquency.
Yours are high risk accounts if they were recently opened, maxed out, and payments missed. That said, I cannot tell you when that will happen. I suspect within the next several months.
You would think that higher balance accounts would see the most lawsuits filed, but that is not always true.
Michael,
It’s a new year. As you know, I’ve been receiving the usual letters of settlement offers, credit reporting, etc from NFCU, with most recent on Dec 4. On Dec 4 they offered the lowest settlement yet, but I am seeing what I can afford. What could be the situation with NFCU now. They stated that the account was charged off, is the account with them still, or with collection agency etc? I know they get if “off the books” as loss for the year, but is the account considered not worth the effort of bothering? I know the banks considered certain amount of risk when writing loans. Why would a loan that has been wrote off as loss be on their minds.. ?
Thanks.
The account is more than likely still owned by NFCU. You can call them to verify that. You could learn the account is placed with an outside collector, or in queue to be sent out.
The account being charged off is just an accounting function. NFCU, like other banks, still care about defaulted accounts. I have seen files, out many thousands over the years, seemingly get lost in limbo, and not follow the normal life cycle of an unpaid credit card or loan.
The best way to determine where things are at is to call NFCU. You may even be able to resolve the account in the process.
Hi Michael,
I have a total of $29,000 in unsecured debt with NFCU. A personal loan and credit card debt.
I lost my job barely 2 weeks after getting them. the money was in an overseas business venture which now has turned kaput.
I have not made any initial payments on any of the accounts to NFCU so i dont qualify for hardship.
What are my options?
Will they sue seeing as i have not made any payments since initiating the loans?
How soon will they sue/charge off?
The loan and credit card are 4 months old.
Can they take my only car?
Is banruptcy an option?
i have no income and have had to move in with family.
Bankruptcy may offer the best solution.
Have you connected with a bankruptcy attorney about your options with these accounts? Are there other debts besides with NFCU?
Michael,
I checked my credit report for the account NFCU and I negotiated to settle. It says that I have balance (the difference of full amount and settlement). In the remarks it says “cancelled by credit grantor.” What does this mean? Also, I checked my NFCU account and it has the updated bill with interest charges as if I hadn’t settled. Could this have something to do with other account they attempting to settle, or are they mutually exclusive?
Thanks
Your NFCU accounts as related to credit reporting are each exclusive of the other. The error in reporting of an amount still owed, when NFCU agree none is, can be corrected. You could skip normal credit reporting disputes by filing a complaint against NFCU with the CFPB about the error. Your concern would reach the right set of eyes at the bank. If it were me, I would wait until the other NFCU account is resolved before doing anything about the credit reporting of the settled credit card. It could flag your account in a manner that is not conducive with your current goals and timing.
If there is an immediate need for your credit profile to show that you do not owe the amount that NFCU is incorrectly reporting (debt to income ratio short of some financing goal), post about that in a follow up reply and lets go from there.
Ok. I will keep you posted.
Thanks
Michael,
I was thinking of waiting til I have the full amount for payoff. Also, I just checked account online again. Also, as I as telling you in the past the CC account with NFCU that I had settled for 6’400 has not updated. I am now seeing a delinquent message on the account main page. I still have all the paperwork from their assigned attorney. I hope I did not get duped. Is this an easy fix? Can it be done without shaking the tree or should I ignore it and hope it gets ironed out?
Vic
You did not get duped. If they try to collect more from you, or report anything about the debt being unresolved, or a balance still owed on your credit reports, post an update. I will have some actionable suggestions for you that should make quick work of them fixing any mistakes.
If it were me, I would not do anything to shake any tree, or otherwise put critical eyeballs on your files, until I settled the final debt.
Michael,
As I previously told you I received a settlement letter from NFCU on Nov 11 advising me the loan has been charged off, however, I did not respond. I just received another letter of settlement for $5’900. This is now 39 cents on the dollar as opposed to their first offer of 45 cents. It stated that the offer is not valid after 30 days. They also said “don’t wait!” as if it was a sales circular. Kind of amusing. Thoughts??
Vic
All offers and notices will generally come with some form of “call to action”. Some have multiple, and some are better put together than others. I have even seen $50.00 gift cards included in getting people to call in and take advantage of an offer.
40% is a good offer. Can you gather up the money to take them up on it?
I have seen credit card settlements with NFCU go lower. I have also seen them only reach this low. And years back only say them accepting 60 percent deals. It boils down to affordability, and the risk reward in holding out for something lower.
Michael,
I had told you about the settlement of 6k with NFCU assigned attorney. I paid in full as specified by the agreement. However, I check the account status online and says I still owe the difference we negotiated down. Basically, account not updated….. I asked you this in the past, which was huge concern for me before. Will this be a problem, or just a case of account not updating? Negotiated settlement was paid Oct 30.
Thanks
It is likely just something with their system. Did you check your credit reports to verify NFCU is no longer reporting any balance owed?
I have had a vehicle loan with NFCU since 2009, I was making payments on time while I was in the military. I was discharged from the military in 2011 and have not been able to find work or been able to make payments on a regular basis. I did make payments in early 2012 for about 4 mts and have not paid since. about 4mts ago I started calling them to figure out or come up with some sort of lump sum payment that may resolve this debt and have heard nothing from the. Then about 2 weeks ago I get a call from a company about repossession. I speak with them and tell them I may be able to cum up with some money to stop the repo or even payoff off the debt but will not be able to come up with the full balance of the loan. So I finally get someone from Navy Fed on the phone and they say that They can do nothing I must contact some attorney. So after calling this attorney for a week now I have not gotten a call back. I want to know what should my strategy be once i get with the attorney. Is there a certain % I should shoot for to get them to resolve the debt. its about 24000. Through family and what lil saving I have now that i’ve been working I have can prob get together about 10-15000. So Should I just offer the total amount upfront and see if they will take that. Or should I wait to see what they say in case that they try to get more than I can give based on what I know I may be able to send them.
I do not see a lot of vehicle loan settlements that involve your keeping the car, but it is possible.
They could come along and repo at anytime, so you may want to continue your efforts at contacting that attorney NFCU has your account with.
Post an update with what develops after that first conversation.
Michael,
I just received a letter today from NFCU stating that my $14’000 account has been charged off. They then offered settlements: Lump sum of $6’714.00 in 30 days; or 24 payments of 522.27; or 12 payments of $746.00. The 6’714.00 is roughly 40 cents on dollar, which is great. However, I don’t have that cash on hand right now. Options? Let it ride in collections land for awhile til I get the money? What would be their next step if any??
Thanks,
Vic
The can decide to sue as a next step. The settlement options NFCU is offering now, would not likely be on the table were that to happen.
How much can you pull together in 30 days?
What amount of money can you come up with monthly with confidence?
Michael,
Going to court at this point does not make sense especially since they willing to settle for $6’700. Probably coat them more in fees just to collect. I can probably swing the 12 month settlement.
Try not to get caught up with thought process that would make sense to you and me. I see collection lawsuits filed for less than a thousand dollars as much as I see them file for more than 10k. Navy Federal is not Capital One though… they (NFCU) are far more reasonable.
Your decision on taking up the 12 month deal, or waiting it out, should hinge on cash flow and confidence you can complete the deal first, then consider outliers like mitigating risk of court collection.
Hello. I also have a NFCU credit card with a max of 16,000. Im sitting right at 15,000 charged on it and am running into health issues and financial issues. No different than anyone elses. Im in Nevada and just closed on a 140,000 manufactured home. I have a 700 credit score, and have banked with them checking/savings and visa card for last 5-6 years. A forgiven late payment or two in the last 5 years. I wont be able to afford the 310$ monthly payment that includes about 140$ a month of interest. 10% locked interest navy federal CC visa. I am unemployed , and am on the deed of the home with a different mortgage company in which i am basically a co signer. They didnt look at my income to approve the mortgage. Should i “homestead” my new house here in Nevada? Whats the worst that can happen? I could possible afford 200$ a month payment if there was no interest involved. I have about 5k in savings. No other card payments, no other monthly debt. Thanks for any advice. I am current on my payments
Best case scenario for a lower monthly payment with NFCU would be roughly 250 a month until it is paid off. If that extra 50 dollars a month is just not doable, keeping current is not an option. And sending less than the minimum required is a waste of money.
If you are serious about resolving the debt with NFCU, and will part with savings, continue to save up what you can each month, for the next 6 months, while not paying (if that is the direction you choose). You have a good shot of settling with NFCU for 40-ish percent. I would not try it unless I moved my checking and savings from Navy Federal (and soon).
Michael,
The Navey Fed account has gone past the stated deadline. All calls have ceased; there have been none for the past 2 weeks. Also, I have not heard from the collection attorney they used with my first loan. What may be going on at this point on their end?
Thanks,
Vic
It is not uncommon for there to be a lull in collection activity just after charge off. Sometimes the reasons for this can be attributed to:
Accounts be bundled for placement with a collection agency adjusting to newly created bank policy.
Collection contracts being renewed around the same time yours charged off.
Attorney or collection agency placement landed somewhere that takes longer than average to integrate new files into collection workflow.
File error (I have seen collection files get lost for months, years, and forever).
A couple weeks without collection calls or mail is well within what I would call a normal quiet period.
Michael,
Seem like it may go to a collections agency, although, I do understand that this is not a definite thing. I figured they attorney already assigned to the other loan would have contacted me already. I am hoping it goes to a collections agency. I feel I can buy more time for a lump sum payment that way.
Vic
I have 2 unsecured accounts with NFCU totaling $77K. I lost my business and can no longer afford to pay $2k per month to them. What is the best credit counseling company I can turn to and get relief? When contacting NFCU they say that my rates are at the lowest and the terms have been extended as far as they can go. At this point I just need relief, I am drowning in monthly obligations. Any advice?
Call the number you see to the right of the screen, 800-268-2706, and complete a consult with a credit counselor. Go over all of your bills, not just the accounts with NFCU.
If credit counseling provides the payment relief you need, you are good to go. If not, post an update and lets go from there.
Michael,
What are the hours of operation for the credit counselors?
You should be able to reach one between 8 am and 6 pm.
Michael,
I have paid my negotiated settlement with nfcu assigbed lawyer for one of my personal loans. My second loan of 14k with them has gone to the 187 day mark. I just received a call today from nfcu regarding the loan and that oct 24 is “last” day to work something out. I thought it would have been charged off by now…. At this point, i do not have sufficient funds to negotiate a settlement. I was thinking of letting it go to collections and placate until i do have the funds. Or, if they do send to same lawyer I delt with, settle through him. Is it possible it could go down collections pipeline and get dragged out giving me time to establish a reasonable settlement? How would I proceed ?
Thanks
The charge off date can come off as taking as many as 210 days.
You can settle your Navy Federal account with the outside debt collector, and that same attorney, or even a different one they may use. Using different strategies to buy yourself time to save up what you will need to settle, is better done when you know who got the account. My feedback will change depending on whether NFCU sent your charged off account to the typical debt collection company, or a collection attorney.
How many months do you expect you will need to save up enough to offer as settlement?
I have 9 K in credit card debt with Navy Federal and it’s been roughly six months since my last credit card payment. They have sent me letters stating they are considering legal action and are in the process of closing out an old savings, checking , line of credit account and/or other accounts. I have my auto loan with them as well and am roughly half way through the loan. Although they didn’t specify my auto loan, can they close my loan account and repossess my vehicle? Or possibly not release the title to the vehicle once it is paid off until the credit card debt is handled?
Your concerns about the auto loan are very real.
What are all the balances on these other Nave Fed accounts? What about other debts with other creditors… what do all of your debts add up to, and are you current with payments on any of them?
The only account with a due amount with Navy Fed is for $115 in an old checking account. Other than that a medical bill for $400 which will be paid off in a month with a collector. Up to date with the auto loan .
If it has not been 6 months yet since you last paid on the credit cards, can you afford 190.00 a month with all your other bills? That is an estimate of what you may be able to get your payment down to if you enroll in a DMP.
If not, you are looking at having to attempt to settle your Navy Federal debts in order to avoid potential collection lawsuits, along with the car issue that is likely later.
My brother got a loan with navy federal to buy a car from someone he met and to make a long story short the deal didn’t go through the seller is no where to be found. A down payment was requested to hold the car and that was sent to the seller and after that there was no contact. So he never purchased the car and the payment on the loan he increased because there was no title provided, which Navy has doubled the interest rate on the loan. How can this matter be resolved?
I would consult with an experienced consumer law attorney nearby. Post the name of a larger city in the area. I will see if I can help you locate someone with the experience you need, that is also likely to offer a no cost initial consult.
I have 15000 on a credit card thats max was only 14. when i found out the card was over the max it was because the card had gone 2,000 over the max before navy federal stopped it. i have since cancelled the card but i am still only making enough to pay off the interest it is growing. I called to speak with them about settling and while one lady would speak with me in detail about it the finical management lady i spoke to told me that navy federal doesn’t do that. My ex husband made most of the charges on this card. several 3000 trips in the matter of a few weeks. I spent what i needed after i kicked him out due to him selling everything he had bought and keeping the money. he also left me with no money in the bank and i still had 2 weeks till my next paycheck that wasn’t much. To this day he owes me 7000 but I’ve yet to see it. i can’t afford a lawyer, and i can’t afford the credit card. I’m drawing in debt and I’m not getting anywhere no matter how hard i try. at this point i don’t know what my best option is.
Navy Federal does settle credit card debt with their account holders, but not when you are current with payments. And not until you have missed several monthly billing cycles.
What is your interest rate on the Navy Federal card?
What other credit card balances are you carrying, and what are the interest rates on those?
Do you consider your job and income stable?
After speaking to a bankruptcy attorney fully expecting to file chapter 13 (as we do not pass the means test) I was shocked to hear them tell us they thought debt settlement was a better option for us. We have 4 unsecured accounts with Navy Federal all totaling about 61K. We have our house and a car loan with them too. We are not currently late on any payments but we just cannot maintain these payments any longer. The lawyer said that he feels strongly that they will settle with us. Obviously I am still nervous. Do you think our chances of settling are better having secured a lawyer or could it somehow make it worse? Also will a lawyer be able to settle the debt for less than we would have on our own? I am hoping to settle for no more than 30%. What do you think the chances are all things considered. Thank you.
If it were not for the secured loans, you could probably negotiate about the same as I, or the attorney could.
I think you have a better shot at settling, while still paying secured debts to Navy Federal, with the attorney.
Michael,
I began making payments to the attorney collector nfcu uses as I had told you. I keep checking my account online. Today I finally seen my payment made to them from the attorney, however, my account still reflects the total amount balance, not the settled balance. As I stated before, I hope I don’t run into a problem with nfcu attempting to collect on remainder of balance. That would be going against settled deal in my opinion. If they do, what recourse do I have? Should I worry, or this normal?
Thanks
If your settlement involved several payments, it is not uncommon for there to be no update to your credit reports until the last payment is in. It is also not uncommon for your payments to reduce the account balance on the credit reports, like is occurring with you, until that final payment reduces the balance to zero.
If you have an agreement to settle the account with Navy Federal, and you meet all the terms on your side, they will follow through with theirs. If they do not, it is highly unlikely it will be related to them trying to be sneaky and collect more. It will more than likely be because there was a mistake in setting up your file for the negotiated settlement. It will not be overly difficult to correct. If something like that happens, post an update and I can offer some action steps from there.
I lost my job in May. I have to wait a while longer to file. I was told that in CO they cannot garnish military pension or disability.
I have debts totaling about 55k to various creditors. All of it is unsecured debt. I have been making my mortgage payments every month.
Not only that, but they have to get the judgment first, which means suing, which you can do some things to postpone any final ruling in order to discharge the debts in the chapter 7. Talk to your bankruptcy attorney if you get any legal papers served on you, or even if you get a collection notice from an attorney in Colorado (signals much higher odds of being sued).
Hi there,
I am retired military and receiving disability. I was working full time, but lost my job due to cut backs. I owe NFCU about 13k in unsecured loans. I have talked to a BK attorney and I did not pass the means test for Chap 7. I have to wait to file. I have little equity in my home and a 12 year old car and no other assets. I live in CO. Will NFCU even bother to sue? What is their leverage against me besides my credit score?
Thanks!
How long ago was it that you lost the job? With the look back on income used for the bankruptcy chapter 7 means test, will you qualify after not working for 3 or more months?
Yes, NFCU could bother to sue over the 13k. That is the leverage besides the credit score… suing, getting a judgment, followed by the opportunity to lien property, levy your bank account or other assets, and wage garnishment.
Are there other debts besides those loans with Navy Federal? How much total?
Hello,
I am going to be 60 days past due on my NFCU CC for 4500 and 1500 for personal loan. I received a phone call today from them, I told them I’ve had trouble getting employment since I got out the service in April. The guy wasn’t willing to delay sending my case to a creditor saying he would do so tomorrow. He then told me that I would likely be sued by the creditor for my debt. I understand this is a scare tactic. I understand that it will ruin my credit, I’m wondering if will just eat the debt causing my credit to be ruined or if it’s a legitimate court case? What steps would they take if I didn’t make payments? Would only my credit be affected?
Thank You.
Can you confidently come up with about 125 dollars each month even though unemployed?
The problem with letting the debt go is indeed the risk of lawsuits and judgments. A judgment gives Navy Federal Credit some extra ordinary collection options that will vary by state. What state do you live in? Once I know that I can reply with what your state limits NFCU to as far as collections after court.
What if you could settle the debts with NFCU for half of today’s balance? Can you come up with the 3k somehow in the next couple months (loan from family, friend, sell a 4 wheeler, etc)?
Your credit is already affected by the 60 days you are late.
I am 70 years old and on a fixed income. We have encountered great hardship of late, due to several unforeseen circumstances, and have not been successful working out a plan with NFCU. We have both a credit card $25k and a mortgage $92k with them. I believe this is cross collateralized between the CC and Mortgage.
Contacting NFCU, they agreed to stop interest on the CC for one year, as I continue to make a minimum payment. Unfortunately, this has not been enough…we have depleted our savings and are now out of funds. I have never missed a payment on anything and am concerned about what could happen if I just quit paying the CC and wait for them to contact me. I am debating the logistics of not paying the CC, transferring the Mortgage to another company, then stop paying the CC or even some transfers followed by bankruptcy.
We are in the State of Missouri & my credit is still above 700, as I have been making payments and while letting necessities dwindle. Any help or suggestion is greatly appreciated.
Brad – What do you estimate your home equity to be? What other unsecured debts are you paying on, other than the NFCU credit card?
About 20k in equity on the home. No other unsecured debts. 2 vehicle loans w/very little or no equity there.
I would encourage you to look into the benefits of filing chapter 7 bankruptcy and compare that along side any benefits to getting a new mortgage. Missouri has a 15k exemption for equity, so depending on comps in your area,you could find you keep the home, reconfirm the car loans and keep paying those like normal (or shed one or both of the cars), while eliminating the NFCU credit card. All without moving your mortgage, and while severing any cross collateral concerns.
Even if you are not seeking cash out refinancing, there are costs to the loan, and you still have the credit card debt with NFCU to contend with. That means collection calls and stresses that you can avoid with the bankruptcy route. If you do resolve the debt later, by negotiating a lower pay off with Navy Federal, that cost could be 8 to 12k or higher.
The national average costs for bankruptcy are roughly 1800 dollars. That is start to finish. The costs in your area of Missouri could be less than 1500 dollars.
There are other things to consider about bankruptcy. You may have to sell off personal items of known value, like a china set, coin collection, motorcycle – you know, stuff….
If bankruptcy is off the table, you could indeed be better off moving the mortgage away from NFCU to another lender. Your DTI with the credit card payment so high may present a challenge. But if you are able to refi, you can maneuver around the credit card debt for a while while saving up to settle.
Do you have contact info for NFCU legal dept or one of their attorneys for the state of Ca? I have two shot loans that I have paid according to the terms of the contract, however NFCU still reflects a balance owed. Which they cannot give me a breakdown of said balance. Not to mention the loans originated with a different credit union and they took over. In the past I have requested info only to be advised they don’t have original loan records. I’m at my wits end!!!
You would call the normal toll free customer service number for NFCU and get transferred, though likely not to their in house counsel.
Do you have all the documentation (bank records etc) to show your payments? Have you considered filing a collections complaint with the CFPB (that would get to the right department I should think)?
Michael,
Yes, I just wanted to be sure that if NFCU attempts to collect on remainder that I can produce a letter from an attorney representing NFCU stating a 75 percent settlement. I hope this would hold up if further action is taken…..
As far as better deal, is that meaning if gets forwarded to separate collection agency? I have delt with this before with another account, asking them to validate etc to buy more time to save up for settlement. I have found it easier .
Thanks
Michael,
I recently logged onto my account with NFCU and I seen that it still shows my visa account at the original amount not agreed on between their attorney and I. Is this just a “housekeeping “issue on their part? I am positive the settlement letter said no further collection will be pursued. I hope that mean even by NFCU who the attorney represents…. Don’t want to pay attorney 75 percent settlement then still have NFCU chase me for rest . Maybe just paranoid?… Also, the other loan they are still doing usual collection calls. Haven’t forwarded to attorney yet. I haven’t been in contact with them about it so maybe they will just charge off.. It’s been longer than the visa account. Wishful thinking?
Thanks
Look for the account to update over time. But I have seen folks with ongoing banking relationships, and additional open accounts, still see the settled account in their summary screens when logged in, and for more than a year!
I would not say you are paranoid, but that your sensitivity is on hyper alert, and that is normal.
Whether NFCU charges off the account or not, you will still be able to settle. But if the account is not placed with attorney collections, you may get a better result (negotiate a lower deal).
Mike- I’m in what I believe to be pretty unique situation with NFCU. I have a solid 15 + year banking relationship with them. Numerous loans and credit cards over the years. Never a late payment on any one until the latest personal loan. My wife lost her income of about 90k per year when the economy tanker which forced all of out bills onto my income. I had a loan for about 12k which I struggled and juggled with for a few years before ultimately charging off in 2014.
We’re now back on solid ground financially and in the process of buying a home. My credit score was between 630-650 after a couple years of recovery but the lender had a concern with the charge off .
We received some poor advice from our mortgage broker telling us to settle the charge off which I did not knowing that it would actually hurt my score as it is now a “recent negative”. My score dropped 60 point over night. I have 90 days to repair it or I lose the house and I have to move out (we are renting shirt term form the seller).
It charged off at about $7500. I set up a payment plan for 200 a month then was advised to settle it so I did (after one month of payments) for $2600.
Do I have any options to get this reversed? I need NFCU to report as paid in full or remove the charge off altogether and resume payments. Is this possible? Thanks for any feedback!
I doubt you have any shot of undoing the settlement, and certainly the charge off.
Who are you going through for the new loan? Ask if they do FHA loans. Also ask if they have any program that utilizes the most recent Vantage score modeling – that does not consider paid collections – like what just happened to you.
Post what you learn and lets go from there.
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