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

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 ?

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.

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

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 :)

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

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.

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.

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.

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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?

Are they not helping because it's government debt? Or just because you are military?

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Hi Darottn,
Darottn If you are really looking for debt settlement then you can opt for debt consolidation. It is advisable to opt for debt consolidation when one has credit card debts. Credit card debts carry higher interest rates. Debt consolidation allows you to pay off the debt sooner, incurring less interest rate. Military loans makes debt consolidation loans and deal specifically for military personnel. They helped me get rid of my debts and their service is highly appreciable. I am sure they will come up with the best solution for you.

Yes, USAA *does* have great auto insurance. I do not envy your decision, it is a tough one. And that's a *lot* of accidents, wow.

sanstephens2,

Thanks for the suggestion but in my situation right now I couldn't get a loan for a penny much less consolidate $80k worth of debt!

Bottom line is without my husbands income (he passed) I am in the hole every month by about $1,500. So all but 2 accounts are now in default by 60 days and counting. I'm settling and hoping to avoid bankruptcy.

I am considering debt settlement however but they say the same about USAA. What I plan to do is make the minimum payments and when I do that I will just take income taxes and see if I can enroll that debt in the program.

Quote:

Hey everyone. I am have been enrolled in a debt settlement for over a year now and have stopped paying USAA for over a year too. I currently have a savings account and insurance with them. Although I don't use the savings account I do currently have auto insurance with them. They will not do anything with your auto insurance. The saving and checking they haven't done anything with that either. Mycurrent settlement would be 6000. The I owe them 11,000. Hope this helps.

I have the same problem and tried to settle with the collection agency. I contact Military Star directly and was told had the account NOt gone to the collection company they would have settled but since it went there I would need to contact the Collection Company. Which in turn stated they could not settle. So if anyone has any clues as to what to do please let me know.

And yes you Tax Return will be garnished. I am facing that now provided I can get a settlement. Please advise.

Unfortunatlly Aafes is no Joke. The Military Star Card debt is considered a Federal Debt. You are right they can collect it by administrative garnishment, take your tax stimulus, and tax refunds. This CA will not request to garnish untill a long period of time have elapsed with no payment, communication, or returned payments have occured on your collection account.

Aafes uses NCO CA to collect on their debts and you will need communicate with them quickly. IMO, I would validate the debt with the CA and then call Aafes to make sure the amounts are in the same ball park. The CA has the right to accure interest on the account over time. So I suggest you set up a repayment plan to stop the interest on the debt. The CA will not settle this type of debt unfortunately :(

The best thing for you to do now to avoid garnishment is pay a lump some of the balance and then set up arrangments for the rest of the balance. I know it sucks but you may have to borrow money from a family or freind to avoid this. :?

80K, you should just do a ch 7 bankruptcy and call it a day. Get a unsecured credit card and rebuild. You will be paying on that 80K for a very long time.

I am wanting to settle wth USAA also, but i want them to show me in writting where I signed that I have to get rd of all my other USAA acconts. I i have never seen that in any papers prior to becoming a member, how are they able to require me to cut all ties with them? I have insurance car and home, 2 car loans, home loan and a credit card for $18,000. I have already been throught the one year paying 1% and no intrest and I still can not get it payed down. I fell they have gotten thier money from me.

USAA has it's OWN debt collection agency built into it's bank... be warned though... a settlement with USAA does not mean that they have forgiven the money lost in settlement... I settled a car loan i so-signed for them and now i can't use my credit card, get auto insurance with them, or even access my account online...

Frankly once i finish paying off my credit card with them, i'm closing my accounts and going to a better institution... a settlement is a settlement, and the guy in collections lied about me not having to worry about it anymore... just be careful. Their form of settlement just means that they will not harass you about you remaining balance... they keep a record of the remainder forever... not that it'll do them any good come the 4 year mark in my state.

I closed out all of my banking with them at my attorney's advice [apparently they can "offset" other debts by just taking the money from your other accounts], however they have not cancelled my insurance products.

I am too concerned about my debt with military star, im medically retired which means that i get my pension thru VA only, I havent paid my military star in over 1 year and im afraid of doing my income tax return, will they garnish this return? should I do bankruptcy first then file? any suggestions will help. by the way I also owe USAA 14k that I havent paid in over a year as well, but they cant garnish, although they have kicked me out of their association and no longer a member, we miss their insurance rates but oh well! life goes on!

I have both USAA and the Star Card. We are going in today to file bankruptcy. It's good to know you can file on them as that is what I was trying to research. so, thank you.

We are filing as USAA garnished our checking account and completely drained it. So, was not a pretty weekend. :o(

I just found out today that because my Military Star Card Account is deliquent and I owe over $7000 on it that they can just take my Federal Tax return from me. I'm so far in debt and about have my second vehicle reposed I was planing on using that refund to file bankruptcy by the looks of things I will still have to pay this debt anyways.

Military star cards can be garnished from taxes. I just had it done to me, even though I had a monthly payment plan set up with their credit agency, and was paying it religiously every month. It is considered a federal debt, just like a federally guaranteed student loan.

They will take it out of your yearly tax returns. They took it from mine last year.

What kind of programs are out there for people hit hard by hardship? having your paycheck garnished everyweek on a disposable income bases on a debt that was origionaly charged off at 1100 dollars and is now being with held out of my check at a payoff of 3528 dollars is highway robbery. When i tryed to make good with them in the past they wanted a lump sum of money over the phone (check or creditcard), and they wanted the ballance like two weeks later. when i told them what i could do they refused. now they can take me to court and i get a default judgment desposition with out being given a chance to defend my self or even plead my case before a judge when it was a civil tort that took place in a court with out MY knowledge... Back in the day that was considerd corruption, now its a "legal" action.

The

[COLOR=black]In order to qualify for assistance, like food stamps and free medical, in my state they want bank statements that cant have more than 500 dollars in the bank. you cant make more than 1200 BEFORE TAXES. but when the state allows a credit company to garnish checks they consider it on a disposable income base after taxes and not medical or dental... WTF? why put on the KY? i make 15 dollars an hour and im single so they tax me more. I have 1 child support payment and now credit garnishment. I brought home before the garnishments and CP, 1030 every two weeks after taxes. Now, 197 every two weeks comes out for garnishment and 125 every two weeks for Child support even though she makes almost 60,000 a year in the military. that leaves me with about 1200 a month to live plus. Heres the KICKER: i went to a four year university and got a BS. in BS lol, student loans 245 a month, and i have a car: 197 a month. not including insurance and my registration due this month,275. FUCK, can i eat mutha$$$$$s? damed if i gotta pay rent right now ifl my gurl kicks me out again, if i gotta fix my car or put gas in that shit. Now these bitc$ muthas from AAFES are getting me for my tax return check for the past two years. and for some strange reason everytime they take it, the balance goes back UP to what it originally was every year when its tax return time. So its the same 2300 dollars every year even though they got me for almost 2k already in the past two years and the original was 2300. BUT YOU KNOW they like to blame it on penalties and interest. that’s why its stagnant. THis is some white collar bullshit!!! I just wanna know how its legal to make me suffer like this? force me to homelessness due to hardship? [/COLOR]
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[COLOR=black]And the reason why i went delinquent on those bills is because of a major car accident that left me unable to walk for 8 months. tryed to write my local congressman and his aid respond that it was, verbatim, "unfortunate of my hardship but"... must i continue how the blame went on me and pretty much called me irresponsible. [/COLOR]

In order to qualify for assistance, like food stamps and free medical, in my state they want bank statements that cant have more than 500 dollars in the bank. you cant make more than 1200 BEFORE TAXES. but when the state allows a credit company to garnish checks they consider it on a disposable income base after taxes and not medical or dental... WTF? why put on the KY? i make 15 dollars an hour and im single so they tax me more. I have 1 child support payment and now credit garnishment. I brought home before the garnishments and CP, 1030 every two weeks after taxes. Now, 197 every two weeks comes out for garnishment and 125 every two weeks for Child support even though she makes almost 60,000 a year in the military. that leaves me with about 1200 a month to live plus. Heres the KICKER: i went to a four year university and got a BS. in BS lol, student loans 245 a month, and i have a car: 197 a month. not including ins vulgar language removed damn insurance and my registration due this month,275d if i gotta pay rent right now ifl my gurl kicks me out again, if i gotta fix my car or put gas in that shit. Now - AAFES are getting me for my tax return check for the past two years. and for some strange reason everytime they take it, the balance goes back UP to what it originally was every year when its tax return time. So its the same 2300 dollars every year even though they got me for almost 2k already in the past two years and the original was 2300. BUT YOU KNOW they like to blame it on penalties and interest. that???s why its stagnant. THis is some white collar bullshit!!! I just wanna know how its legal to make me suffer like this? force me to homelessness due to hardship?



And the reason why i went delinquent on those bills is because of a major car accident that left me unable to walk for 8 months. trIed to write my local congressman and his aid respond that it was, verbatim, "unfortunate of my hardship but"... must i continue how the blame went on me and pretty much called me irresponsible.

FYI...your vulgar language makes your plea worthless....nobody wants to help a potty mouth.

Child support issue....is is YOUR child....dont bitch about paying child suppolrt...it is YOUR responsibility.

AAFES is not just a credit card...it is federal debt, just like student loans. Hardly white collar BS....maybe if you had read your card holder agreement. And if you dont like your taxes being taken, change your withholding. And hopefully you done something with your student loans loans like consolidating them to lower the payment.

You aint gonna get a pity party here.....you had a hardship...pull up your pants and pick up a second job. Deliver pizza's, do something. Was the accident your fault or the other drivers? If it was the other drivers, did you sue them?

[COLOR=black]I just want to point out that the Military Star Card is NOT the same as having a STUDENT FEDERAL LOAN. Both are Federal, but you can't claim bankruptcy on a student federal loan. [/COLOR]
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[COLOR=black]Yes, there is fine print everywhere on card applications and most people can not comprehend what it says, hence the credit problems many people face today and the recession doesn't make it easier. [/COLOR]
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[COLOR=black]Military Star adds % on the balance on the card like regular credit cards do. Which strikes the question is the Federal Government in the lending business through store/ credit cards? I see that they now have a MasterCard. This should NOT be a Federal debt. This is very tricky and that is why you CAN claim a Chapter 7 to this type of Federal Dept. [/COLOR]
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[COLOR=black]Everyone makes their own mistakes and we can only hope that we will learn from them. When you make a post it should be in a kind gesture to HELP others.[/COLOR]
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You’re giving a lesson on "vulgar language", have you ever heard of the saying IF YOU DON'T HAVE ANYTHING NICE TO SAY, DON'T SAY ANYTHING AT ALL? You should use it. It also helps to know what you’re talking about when you make a post. [/COLOR]

Thank you for the advice very informative, options are limited to a chapter 7. I wish i could get a first job. I try ecology auto wrecking, Pollo Loco, pizza delivery, but who is complaining. Vulgarity is a form of relief..for some. like they say if the Coat fits. wear it. I will look for a job early in the morning, have the newspaper line up... wil try the temp agency again, have to make money for the chapter 7. if you have aluminum cans let me I need them. will donate some plasma.

Has anyone been discharged for a chapter 7 and included the military star card. Also I have 2 auto loans with USAA and I only want to keep one auto loan with them do anyone know if this is possible?

very helpfull. a relief I am retired and my wage is garnished at 398 a month today and afees ( the person that i talk to ) said they can take 2/3 of my retired pay anytime they want Chapter 7 is the only option for me.
thank you again...

I just found out that the Star card will not lower your min due on the starcard when you make a payment. Only when you use your card will it recalculate the balance. Visa and Master Cards usually go down when you make a payment so why doesn't the Star Card.

These things vary from one card issuer to another. May be it's Star Cards's policy to not lower your minimum dues when you're making payments.

i went bankruptsy with manny loans but my lawyer said star militarycard that i use to buy merchandize there went to 3600.00 dollors.. the bankruptsy they did not acknowledge ,,,why?
i insured the portable electric organ ,, a caqmera and a plasma tv with them but they exclaim the money or merchandize back ,, why do they claim when the other companies i owed didnt bother mre afterr bankruptsy??

it will take them a yr or two, but they will take their money i worked their

IMO the star card program should be eliminated. It targets young naive military members and cons them into racking up debt they'll never be able to pay. I got my starcard when I was 21 and I never thought to read the fine print, I mean who does when you're young and someone is handing you a credit card? Not to mention the fact that they raise your limit a few thousand every so often as long as you make the minimum payments. It's a scam and it shouldn't be allowed!!!! My debt is only $1,900. I got laid off in 2009 and couldn't find a job for a year. It went to collections with NCO, and they're a whole different breed of scam artists. I was going to try and pay it off but I wasn't sure what the balance was, so I called exchange collections. I didn't know that it was with NCO ( my husband spoke to them and set up a payment plan last december). According to exchange collections I owe them $1917.00 They said they tried to take it from our tax return, but it didn't go through and I'd have to call NCO. They said I owed $2,400.00 I asked how that was and they told me it's because they're charging me 10% interest, 6% late fees and a 21% collection fee. THe payment plan I was on stopped in december and I had no knowledge of it, no one called me to tell me or sent me a letter so now my payments with them are behind by 2 months. I found that odd, since all other collection agencies try to settle the debt. Not NCO, you just keep racking it up month by month and you'll pay through the nose. AAFES makes a ton of profits as it is, and now that they've introduced the mastercard starcard that you can use anywhere, I can't imagine how much worse it's going to get for those young airman basics that have no clue what they're doing to their future when they buy that $2500 plasma. I'm sickened by the whole thing!

You can in fact settle with USAA, and I have a couple of pointers - first, you need to speak to someone in the member solutions department. When you do, tell them the call is being recorded (even if it isn't as it adds a little intimidation). Secondly, tell them you know for a FACT that USAA has settled with other card holders, so it would be disciminatory and against the law not to offer you a settlement. Also teell them (even it is stretching the truth) that you will likely be declaring bankruptcy - this gets them anxious to want some money before they likely get none or less than your propose. In general, settlements tend to hover around 65% but that depends on how current the larger purchases were on your card. The larger and more recent the charges, the higher % they will want to settle - hence the reason the anonymous poster above likely got away with 50% - he waited a year to settle. But really focus on the discrimination whether you have other accounts with them or not - I still have my condo insurance with them and I'm in Florida!

i am currently with a star card in collections and my federal refund is garnished to compensate the debt. I have been very polite and courteous to the collection agency and explained my low income situation at this time. they have said that they will be willing to settle. so u can arrange a settlement. I have spent ten years in the military mostly reserves and did 15 months in iraq and got mortard,, fell in default because of the bad economy and they have been very hard with me, i would hope that at least veterans could get a one time debt forgiveness,,, IT SUCKS,,, NO HELP FOR SOLDIERS, :x

Ur dumb for racking them up so darn high
;)

Just to let everyone know that most of USAA accounts will be held within there offices and most do not make it out to the collection companies.
The issue with this is that the interest and fees go up and second usually the collection company is a lot more willing than most origianl creditors at settling for way less that the original creditors agrigate.

I have had clients that have had accounts stay with a special office at USAA and they only hold until you can pay. We had to write some letters and get a few managers to explain why it has been over a year or so and that account is still not charged off and moved to collections . They stated that it was a special case and that a different office had the file and was holding it and that we needed to contact them over the issue. After further trying to get better explanations and sorting through all the bulls*** that we were told, we were able to get the account moved to collections. At that time the first call made they offered us a 50% offer which is way better than there 75-90% settlements.
So if you have one of these accounts and USAA still has it then you may want to see when the account will be moved to collections or to an outside agency. Get the file out of there hands and the settlements will come down atleast to 50%. They even offered us 6 payments.

Military star is just one tough son of a gun group to work with. They have all the backing to get what they need in order to get paid. No solution to these debts. Good Luck with those. I thought the USAA info would be help to most who are having hard times with these debts.

I know this is an old post but wanted to throw in my 2 cents.

I am now retired military. When I was AD I got behind on my Star Card a few times. I would call them and they always worked with me.

It is a government debt which means they can offset your income tax return and, if you are receiving retirement pay, they can garnish that, without a court order.

Hello. And Bye.