What Can I do to Eliminate Credit Union Debt Without Judgments
My husband lost his job and is unable to return due to his health. I have tried to work with the credit card companies and have gotten satisfactory solutions to most of them. One of the debts is from a credit union that will not settle and wants almost all of the monthly payment so as not to put a judgement on our house. I am at my wits end with them and I do not know what else to do. Help.
What can I do to eliminate this debt without judgements
—Joyce
Debt settlement with credit unions can be iffy business. Larger regional and national credit unions will sometimes offer less than full balance payment concessions and reduced monthly payment plan options that are fair. Smaller, more local credit unions, may not. The tendency with small local credit unions is to simply place the unpaid debt with local counsel they have an arrangement with (which includes authorization to sue) in their effort to collect.
Credit Unions often have cross collateral clauses in many of their loan products which can make negotiating a reduced balance difficult.
I have some questions for you that, once answered, will allow me to comment further:
Who is the credit union?
How late in payment are you?
Do you have other loan products/insurance with them?
What is you current financial ability to address this account? Do you have access to a lump sum of cash you can use to fund a decent offer to settle? Can you afford to re-age the account if payments were smaller?
Post your answers to the above questions in a comment reply below and I can offer more detailed feedback.
Anyone dealing with credit union accounts is welcome to post questions and concerns below.
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, and is a regular contributor to several personal finance websites.
Debt is with Vystar Credit Union. It was a vol repo of a car. It’s about $12,250. I have about $4,000 on hand now. The debt is a year old and half they have filled suit as of a week ago. Haven’t been served and would like to settle if possible. Co
Lawsuits tend to settle between 50 and 80 percent. More on that here: http://consumerrecoverynetwork.com/question/can-you-negotiate-and-settle-a-credit-card-debt-if-you-are-being-sued/
There are no required fields marked.
Credit union Nasa FCU.
Debt $6000
Making on time pmts
Never late
Interest too high
Want out of this debt
Consolidating company for other debt won’t work with them
We can help. You can schedule a call with me to talk strategy here: https://calendly.com/debtbytes/15min
Who is the credit union? BCU (Baxter Credit Union)
How late in payment are you? 12+ months
Do you have other loan products/insurance with them? No
What is your current financial ability to address this account? Poor
Do you have access to a lump sum of cash you can use to fund a decent offer to settle? Not really. Maybe 10-20% of the total.
Can you afford to re-age the account if payments were smaller? No
I do not see many opportunities to settle with credit unions for that low.
I used DuGood Federal Credit Union. I owe them 2,196$. However my credit card is through them (I’m unable to use it) but it still shows as open, ironically enough the credit limit on it was even raised to 3,000.
I’m afraid if I pay them off, it’ll close my 3,000$ card I’ve had for 4 years with them, which is actually helping my overall credit.
I’d love it if you could contact me, I’ve been stressing over this for some time – I have other debts I’m trying to settle with collections. However the FCU is the one that causes me the most worry for the above stated reasons.
I am not sure I understand what you your goal is with the credit union. Are you behind with payments on that account, or current?
I live in Orlando Florida I have a cc for 5000 and it is already in write off statues. How long will it take before they try and sue me? I don’t want to get sue I just need more time to work on a settlement with them.. Navy federal credit union.
I often see settlements of 50% and lower with Navy Federal, and with a year, sometimes more, to pay the deal.
Let me know if you want help with this.
Who is the credit union? Orange County Federal Credit Union (schoolsfirst)
How late in payment are you? Since 2014
Do you have other loan products/insurance with them? I had a car loan but it is paid in full but they are holding the title
What is you current financial ability to address this account? Do you have access to a lump sum of cash you can use to fund a decent offer to settle? Can you afford to re-age the account if payments were smaller? I could maybe fund a lump sum of 50% for 23,000
Go ahead and click the get debt help tab at the top of this page. Complete your profile and schedule a consult with a counselor. We can talk strategy and see about helping you resolve this with what you have to work with.
Hi my son owes over 25 ooo to his credit union it was 37 thousand but he has paid that amount back in the last 10 years he is married and has 3 children he is living in a council house is there anyway he can get any help thank you
Who is the credit union?
Is he current with payments today?
What is the interest rate on the debt?
A N.Y. credit union lent me 15k unsecured. A few months later I lost my job. Since then I have not been able to find permanent employment; just temporary work not long enough to catch up on bills. I also have large credit card balances overdue. I consistently get calls from collection agencies. My girlfriend, (fiance, wife, now sons mother, we are not legally married) the first month unemployed found out she was pregnant. The baby is now six months. I am at my wits end and don’t know what to do. I have not been to court or am aware of a judgement being entered. Will or can the credit union take any refund I might be eligible to receive ? also, is there anything I can do that you are aware of with my situation and the overdue credit cards and financial situation ?
If you keep your checking and savings account with that credit union, I would move banks if it were me.
They would need to have sued and gotten a judgment before they could intercept tax refunds at the state level, and only some state (Michigan for one) allow that. I do not recall a situation for that occurrence in NY.
I would start off by contacting an experience bankruptcy attorney near you and talk about how chapter 7 would give you a fresh start.
I have a car loan with one Nevada credit union. The car is constantly in the shop. My interest rate is 17% and I owe roughly 7k for 2003 likely worth 1k since I was told it now needs a catalytic converter. I would like to know what the chances are they will sue me if I let them repossess it. I’ve been paying on it for 3 years and no longer live in Nevada where I bought it.
A local credit union may not be as likely to sue you out of state. But that is not to say it cannot happen. They could sell the debt to a bad debt purchaser, and many of those companies will sue in whatever state you live in.
You can often settle the deficiency balance after they auction it, and for a discount.
Thank you Michael for a response. I’m in a bad situation right now with a car that’s been a lemon and no job. I’m hoping to trade it in at a big loss when i do start work again but that’s in the future of course. The cu has been very ruthless with my current situation and don’t care that it’s a lemon. Thank you again for the answer. If they sell it as you said what’s the typical time frame I’m looking at?
It can take a weeks or longer.
If you trade it in when getting a different car you would likely be financing the loss in the new loan.
Thanks for this information and looking to work with someone to settle debts I have.
I have personal debt with credit union (2.5 billion CU in NJ) for 16k in CC and 6K in line of credit. They have sued me and received the summons a few days ago. I do not have the money to pay this amount as I’ve tried in the past to get them to lower the payments or settle for small amount but refused to work with me.
I called them a few months ago to try and work things out but was told I needed to speak to their attorney. I called and left a message and did not hear back from them.
5 months later I received a summons.
I’ve found banks and credit card companies easier to work with and credit unions just unwilling. Kind of ironic experiences.
They are suing an old business LLC I had with them including me stating I was a guarantor in that LLC. The LLC was closed in 6 years ago and have the records but never closed the accounts with them.
Can they sue a business LLC for personal debt?
It usually hovers around whether you were a personal guarantor or not.
Are there other debts (even if they are current) besides these accounts with the credit union?
Hi,
My name is lauressa and I’m thinking about settling my debt with firefly credit union which use to be US Federal. They wrote off the unsecured loan. I currently owe 9156.00. I want them to settle for 50% of this amount and i would pay a lump sum. Do you think that would be possible?
Settling with a small credit union at 50% is as good as it gets sometimes.
How long ago was it that you stopped making payments?
Are you dealing with a collection agency or law firm on the account?
What state are you in?
about a year ago I stopped making payment. I currently live in Minnesota. I was trying to settle with them directly. I don’t believe they sold it to a collections agency because i haven’t received anything from them.
I like your chances of working things out directly with the credit union. If they have the account for collection they may direct you to the collector to resolve this, but that is normal.
HI
I owe 12k to municipal credit union in NY and moved to FL can they sue me and garnish my salary?I also cosigned for my brother house in NY,can they put a lien on it?
They can sue you in Florida. If they get a judgment they can try to garnish, but you have some protections in Florida. They may be able to get to the lien on property in New York, but would likely need to have a basis to domesticate the judgment there first. Talk to an experienced debt collection defense attorney in New York about this.
I have a car loan with a credit union that has gone to collections and they are now suing… I have tried to negotiate a settlement. The original debt was 5200 they now want 9000 with intrest and fees I stared low with 1500 and then offered 3000 and they came back and said they will.not settle they want the full amount and I don’t know what my options are if any
Who is the credit union suing? What is the name of the collection law firm? When was the car repossessed?
I think it’s worth about $325K – $375K.
I received a chpt 7 bankruptcy discharge in 2012. I have a first mortgage of 357K with BOA and a HELOC that I received 40K for (they were included in the chpt 7), by the time it went to the credit unions attorney the amount they filed in the judgment record for the 40K loan I received it was listed at 70K, which is why I filed the chpt 7. My house is currently valued at about 300K, I have remained in the house and I continue to pay the first mortgage. I would like to continue living in my house, but I would like to see if the second mortgage with the local credit union will settle, so that I can get their lien released. Since the chpt 7 I never heard from the credit union or anyone about the loan, I was hoping they would have contacted me with a settlement offer . How should I approach the credit union about a possible settlement? What is a reasonable settlement amount since it was a chpt 7 discharged debt? I was thinking about offering them 4K-7K, for a lien release? or is there another way I could get the release?
How much do you estimate the property is worth today? My feedback will depend on the answer to that question.
It’s worth 325K-375K.
I do not think there is much of a shot to get them as low as 4 to 7 thousand dollars. Is it worth a shot? Absolutely! But if it were me I would wait until I have, or have access to, twice that much (maybe more).
I also have a credit card with Vystar Credit Union – balance is $2831 and I’m 30 days behind. I looked into debt settlement to reduce my balance. I spoke with New Era and Curadebt. New Era tells me that my credit union will likely not take a settlement and won’t allow me enroll the card into my program. Curadebt did not mention this at all.
Is one or both lying to me about this? I owe roughly $12,600 in unsecured debt. Am I better off filing chapter 13 and restructuring everything? I filed chapter 7 bankruptcy 6 years ago and was successfully discharged.
Settling debt in the amount at issue here is typically going to be the better path than chapter 13 bankruptcy.
Curadebt not mentioning their experience settling (or not as the case may be) with a small credit union is bad judgment. It is important for people to know what they can realistically expect when struggling to pay their bills. And small local credit unions are difficult and sometimes impossible to get any decent balance reduction from. New Era is doing the right thing by being clear about all of this.
Who are your other account with and what are the balances?
Like many from 2008-2009 I was laid off and my husband’s business tanked. We ended up filing Chapter 7 bankruptcy. Citibank tried to foreclose and mess around with the government refinance program, but with an attorney’s help we proved numerous errors and they were forced to put the house back in our name. The real question is the Credit Union One, second mortgage. We still are recovering financially. The Credit Union has never approached us in 5 years. I don’t know how to approach them for status or negotiations.
–Give me a call Joyce. I can get some needed details from you and discuss realistic options. I am at 800-939-8357, option 2.
I have a question regarding an old car loan that my husband cosigned with his ex wife on. The vehicle has repossessed and sold at a loss, the remaining debt being around 9k. We were never notified of late payments, nor of the vehicle being repossessed by the cu. The loan was with Tulsa Teachers Credit Union. This is an old debt as the vehicle was repossessed in 2013, and we have yet to hear anything from them although it does show on my husbands credit report. We have been considering waking the debt and asking for a settlement, but should we do this? Will they settle? Or won’t they because it is a secured debt?
The loan from the bank was once secured but the car, but not anymore. You can typically negotiate a settlement on deficiency balances that are left over after the auction on a repossessed car.
Smaller local banks like Tulsa Teachers Credit Union may not be as flexible with how low they will settle for as larger banks and auto finance companies. But I would expect them to come down some.
How much money can you pull together to offer as a lump sum payoff?
First off, thank you for the advice…. We would probably try to start the negotiations around $2000, although not much we no longer live in state, and his ex wife has since filed bankruptcy. At least we are offering something. Like I said previously the debt is around 9k, we don’t have much as we pay child support and also have a child together. What are your thoughts, recommendations?
The debt has since been written off as bad debt, I understand the does not alieviate our legal responsibility, but you’d think something is better than nothing?
Something is better than nothing. That is made even more so when debts get older and older. But banks run on policy. The smaller the credit union, the more you are dealing with something where a specific board appointed panel meets once every so often to discuss settlements that are outside of a set policy. If that is the case with this debt, yours is a situation where I typically document everything, and submit that for consideration during one of those meetings. I cannot say for certain, but that may be the only shot you have at getting that low a reduction out of the Teacher’s Credit Union.
Call in for a consult if you like. Its the number to the right that floats along with you as you read the page. Hit option 2 to ring to me.
And student loans for 58k.. Yikes!
If may be better to look at filing chapter 7 bankruptcy in order to get rid of the credit union judgment.
Call and consult with an experienced bankruptcy attorneyy in your area. You may want to look at narrowing your search for an attorney even further by looking for one with student loan adversarial proceeding in bankruptcy court. Contrary to conventional wisdom, student loans can be discharged in a chapter 7. You want to meet certain criteria and also have an attorney that has the experience. Read that article I just linked to before you call an attorney.
They’ve been sending letters to myself and my employer. There’s nothing on my credit about a judgement.
I owe my credit union 10,398. I called to pay this amount and they told me that the balance is now 19,800 because of interest. The account was charged off and sent to an attorney in 2009. I was banking with Andrews Federal. I don’t have any accounts with them currently. It’s schedule to fall off of my credit in 4 months, but they have been trying to garnish my checks, but I’ve been working through temp agency’s. No real full time work. What are my options? Thanks!
The credit union has a judgment if they are trying to garnish. I would encourage you to try to settle the debt for the best savings possible, and also look into filing chapter 7 bankruptcy.
Are there other unpaid debts out there besides this one?
One other one that I owe my school. 6k. I’ve paid everything else off. I waited to pay the credit union last because it was my biggest debt.
Financed a vehicle with a Military Federal Credit Union in 2005, Hurricane hit end of 2005 and I was displaced and almost lost my home… still made payments on my vehicle. Refinanced in 2007. Deployed in 2010 and continued making my payments while deployed ( not a requirement while deployed) and when I returned from my deployment the account was turned over to an attorney for payment because the mailed payments I made were returned because I had the wrong zip code.. December 2014 attorney filed a wage garnishment and so far I’ve paid 5K with wage garnishment. I called today to get a payoff amount and the secretary said it’s $9400.00. The credit union wont talk to me, they just tell me I’m no longer a member and talk to their attorney. What advice do you have for me. My home is in foreclosure and will be up for auction next month.Can I sue the credit union?
Were you sued while active duty overseas?
I owe my credit union Kemba FCU $2,500 in the next 27 days. What are my options in terms of repayment over a year span?
What type of account do you have with the credit union?
How late are you with any payment (if you are late at all)?
We are being sued by a local credit union stating we were thirty days late. She is seeking the full 11000 balance plus court costs. When we received notice the payment was fifteen days late we paid it. She filed suit 3 days after she cashed the check? Can they win a judgement since the payment is current? And was before she filed suit? Thanks
That is highly unusual, even for a credit union. What is the name of the bank?
Hi Michael:
I have a credit card debt with a credit union in GA. The amount is $15,550.
I live in AL. I received a letter today from a collection attorney stating who they represent and that the debt has been declared default. They are requiring that the debt be paid immediately. I cannot pay this otherwise I would have been doing so. I opened this account in 1990.
I am unemployed since 12/2013. Benefits have run out. Our household income is in dire straits. Reduced 75% since 2012. Almost bankrupt. Our mortgage payments 1st and 2nd are behind. Should I call the law firm and offer to pay a % lump sum and then hopefully stretch payments to 12 months on balance of settlement? How much would a reasonable settlement look like? I have no savings and barely any $ to meet other bills like food, utilities and basic necessities. The outlook for employment is positive but could be within 3-6 months or sooner. Things are picking up. Please advise
In the past, I have seen credit card settlements where you pay back 50 to 60 percent of the balance owed, and over a 12 month period. Negotiating that type of outcome with an original creditor, and especially with an attorney collecting for a credit union, is not common at all.
For one, credit unions do not approve the best settlements, and second, the longer the payment plan you need, the likelier it becomes that your not really settling, but paying the original balance over a longer period.
You may be trying to avoid it, but have you talked to a bankruptcy attorney about what chapter 7 or 13 would look like for you? You may be able to discharge unsecured debts, like this credit card with the credit union, and have that cost less than the settlement you would hope to get with the attorney.
How much equity do you have in the home?
Hi, I have a non-purchase money heloc for 75k on my primary residence. I am not paying on it because I cannot afford it anymore due to a drastic reduction in pay. My first mortgage is for 310k and my home is underwater and is currently valued at 250k. They are a credit union that has multiple locations throughout the phoenix metro area (pretty big credit union in the state). So my questions are:
* Will they negotiate a settlement?
* Will they foreclose knowing they get nothing and it all goes to the first lien holder?
* Will they sue when they know that I have nothing to give them and will just file bk 13 anyway?
* Will they sell my debt to a collection agency so that I can negotiate a settlement with them?
Jack – Answers are in order of appearance above:
Nearly all debts are negotiable. What you can realistically target is a moving target. Credit Unions of the size you describe do not typically settle for the best savings, but in an instance like you have, and in a hard hit housing state, perhaps better savings is possible. But what is the amount you have in mind?
I would not expect them to instigate foreclosure at this point. But some pretty stupid stuff happens when banks rule by committee, and set inflexible policies.
Yes, they will sue. They will not care if you file chapter 13 or chapter 7 bankruptcy.
I would need to know more about the bank to know there recovery strategies, and whether that involves debt sales. Many smaller state and regional credit unions will not sell off debts.
vystar credit union
Jacksonville fl
14,500 debt owed
Freedom debt relief said they could settle, but after almost two years, still no settlement.
Any clue on who will deal with this credit union?
andrew – Credit Unions are a bit more difficult. Some smaller ones will not settle at all. What has transpired working with Freedom Financial to date? Have you been saving up money consistently each month to fund the settlement with Vystar? How much is in your escrow account right now? Was there a lawsuit filed to collect, and if so, when? If no lawsuit, do you know who is collecting on the account now if not Vystar?