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Military Star Card and USAA Credit Card debt - can settlement be done?

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I am retired military and I have a Star Card and a USAA credit card both total about 28K combined (of my 80K debt). While doing my research I ran across a couple of sites that say those debts cannot be settled!

I was getting ready to start my debt settlement (stop paying bills) until I ran across this information. I still am, but if these two cannot be done it will throw a big wrench in the plan.

Can anyone tell me if these debts can be garnished like IRS, child support and Treasury debt?




Yes these debts can be garnished depending on the state you live in. What state do you live in by the way ? Military Star Card and USAA are both pretty difficult to settle with. Have you looked into a dmp with a 501 (c) 3 non-profit credit counseling company first ?

Sub: #1 posted on Fri, 01/02/2009 - 05:49

mobile0311 mobile0311
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Thanks for the response. I live in Virginia. I talked about DMP with CCCS for paying off Military Star Card debt. The payments would have been $2100 a month! Thats more than I would pay monthly if I was paying all of the original debts.

Sub: #2 posted on Fri, 01/02/2009 - 06:32

darottn1 darottn1

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Hi darottn1,

Are you still on time with your payments? Perhaps you should write to them asking for Debt Management terms. Also, mobile0311's advice is applicable.

Military Star Card:
Exchange Customer Contact Center
P.O. Box 650524
Dallas, TX 75265-0524.

USAA FSB
10750 McDermott Freeway
San Antonio, TX 78288-9876

But with $80k debt, and retired, I would advise filing for bankruptcy. You would need to try Credit Counseling by a Dept of Justice approved counseling agency, first. At the very best, they may be able to help you with a budget and debt management services. If not, then you can easily matriculate to bankruptcy. (btw, CCCS does appear to be an approved agency, so you made a good move there!)

Since you are retired military, I assume you are getting a Federal pension? In that case, check out The Defense Finance Accounting Service. From what I can tell, as usual past due child support, alimony, and taxes can easily be garnished. It would take a court order for a garnishment to happen any other way, and I would think that you have adequate defense to protect yourself against a garnishment.

Good luck, and I personally thank you for serving our country.

chrys

Sub: #3 posted on Thu, 02/05/2009 - 03:20

Chrys Henderson Chrys Henderson

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Thank you chrys!

No actually, I tried to go through CCCS and their DMP but the payments they wanted would have been about $2,500 a month. That's about $700 more than what I would pay just doing the minimums on all my cards.

Right now, I stopped paying all my accounts except the USAA and the STAR cards. I'm at 30 days delinquent, so just getting started. I got a loan modification on my 2nd mortgage and I'm just saving up until I get close enough to settle the rest. The creditors have been calling like crazy but I just ignore the calls.

I was nervous about the USAA and STAR because I was looking at alot of the settlement companies that said they could not settle on cards from those companies. I was wondering if it was because they had some Government affiliation?

And your welcome :)

Sub: #4 posted on Thu, 02/05/2009 - 13:39

darottn1 darottn1

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I know the star card is considered publically backed....which means government debt...garnishment without a court order, tax seizure etc.

Sub: #5 posted on Thu, 02/05/2009 - 14:07

SOAPLADY SOAPLADY
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Darottn1 - I've posted a few questions here on USAA, which you probably can find if you seach under USAA. And while I was never in the military, my wife has been a USAA member for 20+ years since her parents were in the Navy. We currently have $24k out with USAA. I haven't signed up with any debt settlement companies, but I have spoken to three different firms. All three said pretty close to the same thing about USAA. If you have other accounts there, savings accounts, car insurances, etc, you have to close them before they will try to settle your USAA debt. We have our car insurance through USAA, and my wife is EXTREMELY partial to them, so this is somewhat problematic for our situation -- it's either find a new car insurance company (which I don't mind) or pay the debt we can't afford. But all three companies did say that they can settle with USAA, once our other relationships with them were terminated/closed.

I'm not sure what we're going to do regarding USAA. Even if I find a way to keep them current, not sure how that will affect my ability to settle with other creditors.

Sub: #6 posted on Thu, 02/05/2009 - 14:09

ball_mich ball_mich

(Posts: 360 | Credits: )

soaplady,

Yeah I figured that about Star so I'm just gonna keep paying them. I'm also a govt employee as well so they won't have any problems taking my money!

ballmich,

I don't have any insurance or anything else with usaa. They are actually my highest card at 20k, plus the interest is so low and they don't do that universal default where they raise the rate because you default on other accounts. It's the only cc I'm going to keep current and pay. The rest just have to go.

Unfortunately, I wrongly budgeted both mine and my husbands income and when he passed away the impact of not having his income really hurt. I kept up pretty good for a while. Then I depleted my savings, medical bills for him were astronomical and then it all came to ahead. So here I am.

I just hope that I can all of them settled.

Sub: #7 posted on Thu, 02/05/2009 - 15:39

darottn1 darottn1

(Posts: 72 | Credits: )

I stopped paying my usaa card about a year a go they have offered to settle with me for 50% of the debt but that would be $14000 and they want that now.

Sub: #8 posted on Thu, 02/19/2009 - 20:09

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Quote:
I stopped paying my usaa card about a year a go they have offered to settle with me for 50% of the debt but that would be $14000 and they want that now.


Good to know. I had heard that they will settle. I will need a little better than 50% though.

This debt was 365 days past due? And they didn't send it to collections?

Also, do you have any other accounts with them (savings, insurance, etc)? If so, has it affected those accounts?

I did a fairly sizable balance transfer with USAA and have only made 5 payments since. I'm definately trying to keep this one current as long as possible... but realistically, that's probably only 1-3 more payments depending upon my income.

Sub: #9 posted on Thu, 02/19/2009 - 20:48

ball_mich ball_mich

(Posts: 360 | Credits: )

I'm in the Military, myself. I'm finding out if you have any debts (concerning the Military,anyway..) that alot of Debt Consolidation companies won't help. I think it's kind of sad. It's almost like discriminating aqainst you for serving our country..ya know?

Sub: #10 posted on Fri, 02/20/2009 - 04:39

sdchargers_63 sdchargers_63

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