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It isn’t unusual for many Veterans to find themselves in credit card debt after they transition from active duty to civilian life, especially if they are on fixed incomes. Fortunately, many existing Veteran credit card debt relief programs can reduce your balances, consolidate payments or forgive some of your debts under specific circumstances.
There is real help out there for you, and in this guide, you will learn where you need to go to find it. You will never be left alone on the side of the road because we are going to show you what you need to do every step of the way.
How Veteran Credit Card Debt Relief Works
You have several options for credit card debt relief. For example, debt consolidation is an option for someone with several debts. With debt consolidation, you can roll over all of your debts into one loan or place them all on one credit card. This simplifies your finances because you will only have one debt to repay instead of three or four, and your interest rate will be lower. Lower interest rates mean that your monthly payments will be lower and less stressful for you to pay.
Debt settlement is an option in which you negotiate with your creditors to reduce the amount you owe. This is a type of credit card debt forgiveness for Veterans because your creditors agree to forgive the balances or give up the right to continue collection efforts.
Credit counseling is when a trained counselor reviews your finances and helps you create a budget. The counselor will develop a plan that will reduce your debts to zero. This professional also offers you resources that teach you about finances so that you are less likely to get into financial difficulties in the future.
Any of these solutions can be personalized for your situation to address your specific financial needs and goals.
Is Veteran Credit Card Relief Real?
Yes, Veteran credit card debt relief programs are real, and they offer veterans real financial help. Even so, you must perform due diligence when choosing Veteran credit card debt relief. Not every program that advertises itself as a “Veteran credit card debt relief program” is legitimate. For example, if a company charges upfront fees to begin working with them, it may not be the best solution because this may be a mark of a scam. Companies such as these take your money in the beginning and do little to nothing to actually improve your situation.
Another way to spot the disreputable companies is to ask if they are accredited. These companies are not required to be accredited, but the best choice is a company that fits this description. Before you begin to work with a company, check with the Better Business Bureau to ensure that its accreditation is intact. Then, visit the state attorney’s office and find out if there are any complaints against the company. You can also discover complaints against a company by visiting the Consumer Financial Protection Bureau and the Federal Trade Commission.
Some scammers specifically target Veterans, so it is in your best interests to check them out as thoroughly as you can.
Credit Card Debt Relief for Veterans: What Are the Options, and How Does It Work?
With debt consolidation, you will roll over your debts into a new loan. You can do this by taking out a personal loan if you do not own your home. If you own your home, you can apply for a home equity loan provided that you have enough equity. Lastly, you can apply for a credit card that offers you a high credit limit. Then, you will transfer your debts to that credit card to take advantage of a lower interest rate.
Let’s say that you decide to apply for a credit card with a high credit limit. If you have several credit cards, you can transfer the balances of these cards onto your new card. Keep in mind, though, that your old accounts are not automatically closed, it is simply a balance transfer. You would need to close the old accounts yourself if you don’t want to keep them open. This is one reason why consolidation often doesn’t work for people in debt: after transferring their balances, they may feel like they’ve “freed up” their old cards and end up spending even more. The difference is that you now have one main debt to manage instead of several, which can make repayment feel more organized, but only if you avoid taking on new balances.
With debt settlement, a counselor enters into negotiations with your creditors. The purpose is to obtain agreement from each creditor to accept less than the amount that you owe. You can always do this on your own, but having a professional do this for you makes it easier on you. In most cases, the credit counseling company will advise you to stop making your credit card payments so that your creditors will be willing to go into negotiations with you and the company.
The company sets up an account, and you will begin to make payments into that account. Your counselor waits for sufficient funds to be in your account, and when this occurs, they will begin negotiating a settlement with your creditors. This is an option that may require two to four years to be completed, so keep this in mind before you decide to do this.
With credit counseling, you must agree to meet with your counselor for periodic counseling sessions. In the initial session, the counselor will interview you to learn about your current financial situation. With this information in hand, your counselor will develop a budget for you and create a debt management plan.
Counselors do not necessarily negotiate with creditors to lower your balances. Instead, they deal with your creditors so that you can receive lower interest rates on your debts. This decreases the amount of interest you pay and reduces your monthly payments in the process. However, while you are in counseling, you will make monthly payments to your counselor, and your counselor will pay each creditor out of this fund.
Using this option, you have a counselor who works with your creditors so that you are not charged late fees. It also procures lower interest rates on your debts.
Several debt relief organizations cater to Veterans that offer debt consolidation, debt settlement and credit counseling.
What Options Are Available for Veterans Credit Card Debt Forgiveness?
Veterans do not have many options for eliminating Veteran credit card debt.
Is There Credit Card Debt Forgiveness for Veterans?
In fact, Veterans credit card debt forgiveness is not necessarily complete forgiveness. In general, these programs offer debt relief rather than forgiveness. Debt relief includes the options that were listed above. If you are experiencing significant financial hardship or have a permanent disability, you may qualify for a program that partially discharges or even fully discharges your debts.
You are not going to find any VA or other government programs that offer Veterans credit card debt forgiveness. However, you may find a hardship program that credit card issuers, non-profit organizations or debt consolidation companies offer. For example, your credit card company is very likely to have a hardship or forbearance program. With these programs, you may be able to have your minimum payments reduced, have late fees and penalties waived, and interest rates lowered for a specified period of time.
If you decide to pursue the option of debt management, your counselor may be able to find a program similar to the ones listed above. This will make your payments more affordable for you.
Debt consolidation through a financial organization for Veterans is another option for consolidating your credit card debts.
You must be cautious when you are searching for Veterans credit card debt forgiveness. In a lot of cases, advertisements stating that they have forgiveness programs for Veteran credit card debt are not being truthful. The FTC and Military.com state that if you come across anyone offering Veterans credit card debt forgiveness, these programs are scams.
Disabled Veteran Credit Card Debt Forgiveness: How Does It Work?
Disabled Veterans experiencing financial hardship may benefit from hardship-based arrangements, non-profit relief funds or organizations that partner with the VA. These programs offer relief from financial burdens that result from disabilities related to your military service.
For the most part, credit card companies do not offer disabled Veteran credit card debt forgiveness, even though you are permanently disabled, but they may have a hardship program that will reduce your payments, stop interest from being added to your debt and waive fees. A credit card company will rarely discharge a debt in full.
A disabled Veteran credit card debt forgiveness option would be to search for a non-profit organization that caters to Veterans. One example is in Nevada called the “Nevada Veterans Fund,” and it offers Veterans temporary financial assistance. This is not a disabled Veteran credit card debt forgiveness program, but it offers financial assistance that you can use to keep making your payments on time. Therefore, you will not be in danger of defaulting on your credit card payments.
Helpful Veteran Credit Card Debt Relief Resources
How to Find Veteran Credit Card Debt Relief Programs
The best thing that you can do is search for accredited counseling agencies for credit card debt relief. You also have the option of finding non-profit Veteran service organizations and government-backed resources. These organizations are safe and will act ethically, protect your rights and will not make the unrealistic promises that the unethical companies make.
The U.S. Department of Justice keeps the List of Credit Counseling Agencies Approved Pursuant to 11 U.S.C. 111. You will be able to find a credit counseling agency by judicial or state district by consulting this list.
The National Foundation for Credit Counseling is another credible resource. Its members are credit counseling agencies that offer debt management services, budgeting advice and credit counseling.
How Does Veteran Debt Consolidation for Credit Card Debt Work?
Consolidate means to combine several different elements into one, and this is what “debt consolidation” does. It combines all of your credit card balances and creates one loan. The new loan will have a lower interest rate than all of the interest rates you were paying for all of your previous balances. This saves you a lot of money in interest and reduces your payments so that you can pay off your debts in a shorter period of time.
Consolidation is highly convenient for you because you will no longer be making several payments to several different creditors. You will only need to make one payment, so it doesn’t just save you money; it also saves time. Because you are paying less in interest, you will have more disposable income. If you were having difficulties paying your monthly bills, debt consolidation is going to make it easier for you to do this.
However, debt consolidation alone doesn’t solve the root cause of financial strain. Without changing spending habits or addressing the reasons debt built up in the first place, it’s easy to fall back into the same cycle.
Some people transfer or consolidate their balances and then begin using their credit cards again, effectively doubling their debt instead of reducing it. Before consolidating, it’s essential to create a realistic budget, pause unnecessary credit use, and focus on financial behaviors that prevent new debt from accumulating.
Veteran Credit Card Debt Relief FAQs
You can find valuable information on debt management and financial counseling services from the Department of Veterans Affairs or the VA, Veterans of Foreign Wars and the American Legion. When you contact any one of these organizations, they can send you in the direction of programs that will help you apply for hardship-based assistance, find professionals to negotiate lower payments for you and help you make a budget.
You can also find debt management for Veterans from accredited financial counseling agencies approved by the U.S. Department of Justice and the National Foundation for Credit Counseling. They are known to be reputable, and you can find personalized help with your finances and avoid predatory debt relief scams. Instead, you will find resources that will help you reduce your financial burdens and education that helps you manage your finances better.
Military Debt Consolidation Loans are another option for Veteran debt consolidation. This option is a little bit different from the debt consolidation loans that were described above. For an MDCL, you will need to own a home because you are going to do a cash-out refinance. This requires that you refinance your mortgage loan for an amount larger than the balance on your current mortgage loan. With the proceeds, you will pay your mortgage in full, but you will be able to do anything you want with the balance. In this case, you will pay your credit card balances in full. Then, you will repay your mortgage loan with monthly payments.
Disabled Veterans have the option of asking for assistance from the Disabled Veterans National Foundation. You may be approved for this foundation’s Grants to Provide Stability Program. If you are having difficulties making your credit card payments, you may be able to receive a one-time $1,000 grant that you can use for rent, utilities and other necessities.
You can find valuable information on debt management and financial counseling services from the Department of Veterans Affairs or the VA, Veterans of Foreign Wars and the American Legion. When you contact any one of these organizations, they can send you in the direction of programs that will help you apply for hardship-based assistance, find professionals to negotiate lower payments for you and help you make a budget.
You can also find debt management for Veterans from accredited financial counseling agencies approved by the U.S. Department of Justice and the National Foundation for Credit Counseling. They are known to be reputable, and you can find personalized help with your finances and avoid predatory debt relief scams. Instead, you will find resources that will help you reduce your financial burdens and education that helps you manage your finances better.
Military Debt Consolidation Loans are another option for Veteran debt consolidation. This option is a little bit different from the debt consolidation loans that were described above. For an MDCL, you will need to own a home because you are going to do a cash-out refinance. This requires that you refinance your mortgage loan for an amount larger than the balance on your current mortgage loan. With the proceeds, you will pay your mortgage in full, but you will be able to do anything you want with the balance. In this case, you will pay your credit card balances in full. Then, you will repay your mortgage loan with monthly payments.
Disabled Veterans have the option of asking for assistance from the Disabled Veterans National Foundation. You may be approved for this foundation’s Grants to Provide Stability Program. If you are having difficulties making your credit card payments, you may be able to receive a one-time $1,000 grant that you can use for rent, utilities and other necessities.
Retired Veterans cannot get debt forgiveness for credit card debt, but you may qualify for debt relief or a settlement program. This will depend on your current financial situation and the amount of money you make.
If your credit card debt is forgiven, the amount that you no longer have to pay may be taxable. It may not be taxable if you filed for Chapter 11 bankruptcy and your debts were wiped out. If you are insolvent, the amount of money that was forgiven will not be taxable. However, you must consult a tax professional and make sure that you are not required to pay taxes on your canceled debt.
In most cases, debt forgiveness does not have any adverse effects on VA disability payments. Even so, the best plan for you is to seek a consultation with a VA financial counselor to make sure that your forgiveness program does not impact your VA disability payments.
As a treasured Veteran of the United States’ military, you must remember that you are not alone in this world. Several solutions exist that will help you manage your credit card debt or reduce it to a manageable amount. You can find this help by searching for the non-profit or veteran-affiliated organizations first. If that doesn’t work for you, private companies are another option. With the right guidance and legitimate resources, Veterans can rebuild their finances and achieve lasting peace of mind.