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Home » Credit Card Debt Relief » Credit Counseling » Military and Veteran Debt Relief
Five Military Debt Relief Programs
Members of the military have plenty to worry about when they are serving our country. The last thing they should have to worry about is if they paid the mortgage and credit card bills this month.
The good news is there are laws that protect servicemembers from many civilian credit worries. The bad news is a lot of military personnel still suffer severe financial difficulties and have a hard time finding debt-relief options. There are programs to help active-duty military and veterans with debt relief. Best to start with the most significant.
Here are five programs designed to help active-duty military and veterans:
Servicemembers Civil Relief Act – This federal law, originally enacted in 1940, regulates interest rates for credit cards, auto loans and other financial services for active-duty military. It also requires landlords to let you out of your lease, without penalty, for deployment. The SCRA has been amended and protections have been added to help with evictions and wage garnishments.
Military Lending Act – Under the Military Lending Act, servicemembers cannot be charged more than 36% interest for credit products.
Veteran’s Housing Benefit Program – This program offers loans to veterans at very low rates.
Nonprofit Credit Counseling– Free financial counseling provided by nonprofit companies like InCharge Debt Solutions.
Debt Consolidation– There are a few options in this category, any one of which could provide the debt-relief solution best suited for your problem.
Whether it’s a debt management program, a debt consolidation loan, debt settlement or, in the most severe instances, bankruptcy – consolidating your debt can ease the strain. Debt can feel unending, but there is a way to seek military financial help and find one of the several ways to consolidate debt.
Servicemembers Civil Relief Act
It’s been around since 1940 and was initially called the Soldiers’ and Sailors’ Civil Relief Act, though its origin dates back to the Civil War. Congress passed legislation that gave relief to soldiers who could not pay their debts while at war. Union privates made all of $13 a month in the Civil War, which was actually $2 more than their Confederate counterparts. That wasn’t a lot, but at least they didn’t have to deal with collection agencies threatening to ruin their credit score. The Servicemembers Civil Relief Act limits those hassles and provides other protections for active-duty personnel. The law bans creditors from proceeding with foreclosures, evictions, garnishments and repossessions and other actions until 60 days after a service member returns from active duty. When service members are called to active-duty, lenders are required to set a maximum interest rate no higher than 6%. Despite such protection, studies show that more than one in four military families carry $10,000 or more in credit card debt, and 10% of families owe $20,000 or more. More than half of enlisted and junior non-commissioned officers reported they often make only minimum payments on their credit cards.
Military & Veteran Debt Consolidation Loan Options
If you are looking for a debt reduction plan, a good place to start would be examining the interest rates you pay on your current bills, especially credit card debt and compare those against the interest rate charges for a debt consolidation loan. One form of debt consolidation is taking out one loan to pay off several smaller loans. It is most often used to eliminate credit card debt because debt consolidation loans should have far lower interest rates and agreeable terms.
For example, depending on your credit history, you could get a debt consolidation loan of 8%-10% interest rate to wipe out credit card debt that probably has reached 25%-30%.
There are several types of debt consolidation loans – personal loan, home equity loan, military debt consolidation loan, balance transfer loan, loan from family or friends – and each has its advantages and disadvantages.
Personal loans: This is the most common form of debt consolidation. You go to a bank, credit union or online debt consolidation lender, ask for the amount you need to pay off credit card debt, they check your credit score and payment history and approve or disapprove your loan. More than 20 million Americans owed over $178 billion in personal loans in 2022, a 24% jump over the previous year. About 3% of personal loans were over 60 days past due.
Home equity loan: This loan has the lowest interest rates for one very important reason: You are putting your home up as collateral. If you miss payments, you could lose your house. In return, you get interest rates as low as 6% compared to the national average of 17.92% for credit cards.
Military Debt Consolidation Loans: If you have a VA loan on your home, you may qualify for a Military Debt Consolidation Loan, which has a lower interest rate than standard civilian consolidation loans. With a consolidation loan, you can pay off all unsecured debts – credit cards, medical debt, payday loans, etc. – and then make one monthly payment to a single lender.
Balance transfer cards: The attraction here is that you pay 0% interest for an introductory period (usually 6-18 months), giving you time to pay off credit card bills at no interest. However, it’s very difficult for people already in trouble with credit cards to qualify for a 0% interest card. If you do qualify for one, you must pay off your debts in the introductory period or your rate soars to 18%-20% or higher.
Family and friends: This could be the place to get the lowest rates and best repayment terms IF both sides trust each other and act responsibly. IF they don’t, this can ruin relationships and be a really bad idea.
If you’re not happy with any of these choices, you could consolidate your debt without a loan through a nonprofit credit counseling agency. Credit counselors walk you through the steps of setting up a monthly budget and then recommend debt-relief options. One of those is a debt management program, which doesn’t require a loan and doesn’t consider credit score as part of the qualifying process. Debt management programs are a good way to eliminate debt, eventually increase your credit score and relieve stress from financial problems. Counselors work with lenders to reduce the interest rate you’re paying and the amount of your monthly payment so that all debt is eliminated in a 3–5-year period.
Homeowners Assistance Program (HAP)
Homeownership is practically a given in the military – 51% of millennials in the military are homeowners – but with that comes another given: There are likely to be problems keeping up with payments. The Department of Defense recognized that and set up the Homeowner Assistance Program (HAP), which provides financial assistance to qualified candidates facing a crisis concerning their housing. HAP covers active service members, veterans, surviving spouses and civilians working in the Department of defense. It provides financial assistance for those facing foreclosure, having to sell their home at a loss or being unable to sell their home, or those dealing with collections agents. Members of the Armed Forces who incur a wound, injury, or illness in the line of duty during deployment (30% or greater disability) also qualify for assistance. Applicants who qualify receive financial assistance under one of three scenarios:
Private Sale: Benefit amount is the difference between 95% of the home’s prior fair market value and the selling price. HAP may also reimburse the applicant for normal and customary seller’s closing costs
Government Acquisition: Benefit amount is the greater of 90% of the home’s prior fair market value OR the mortgage(s) payoff amount
Foreclosure: Benefit is paid to the lien holder for legally enforceable liabilities.
The Military Lending Act of 2006
The Military Lending Act of 2006 limits predatory practices. More relief is offered through the Veterans Administration. The VA home loan program usually looks at only the previous 12 months of credit history unless bankruptcies, tax liens or collections are involved. It also doesn’t require a down payment, and interest rates are typically lower than those offered with conventional loans. Military service members can also get a loan by refinancing their house through the VA. Qualified veterans can use the Interest Rate Reduction Refinancing Loan to obtain a lower interest rate or change from a variable rate loan to a fixed rate. If you want to take cash out of your home equity, the Cash-Out Refinance Home Loans programs lets you replace your current loan with one that has new terms. The danger is your house is collateral and can be foreclosed if you don’t make the payments. Serious decisions like this require careful consideration.
Free Credit Counseling for the Military and Veterans
InCharge Debt Solutions offers free credit counseling to the military and veterans. If you qualify, you may join a Debt Management Plan, which could help you pay off your debt over 3-5 years. Qualifying depends on factors like the amount of debt as well as your income. The easiest way to find out if you qualify is to take part in a free credit counseling session.
Instead of having an array of bills to keep track of, debt consolidation or a Debt Management Plan would mean writing one check per month. Whether that’s the answer or not, there are far better solutions than the quick fixes offered by payday lenders outside of military bases. The last thing a member of the military needs is for bad credit to make them a discredit to the armed forces.
Grants for Active Military and Veterans
The VA has a number of grant programs designed to help veterans and military families deal with everything from finding a permanent residence to gaining access to cultural community events to hiring legal aid to receiving financial aid for a college education. The grant money is generally awarded to local civic and religious groups who then disburse it to veterans and active military. To find the list of available grants for the military service members and veterans, visit these sites:
Grants.gov – This site is part of the Veterans Administration and offers grant information on locations for applying for grants.
GrantWatch.com – Lists grants from all over the country for nonprofits, faith-based organizations and 501 (c)(3) to help veterans with everything from finding a home to technical training for a job.
Finaid.org – This website focuses on grants for veterans and their dependents.
USVeteransMagazine.com – This site, like Finaid, has a long list of places for veterans, service members, their spouses and dependents to check for grants to attend college.
MilitaryBenefits.com – Features a page on 10 benefits that veterans might not know about, including information on long-term care, certification programs and unused GI Bill benefits.
Other Debt Relief Options for the Military
Along with specialized debt relief solutions available to military servicemembers and veterans, there are other options that can be utilized by anyone. All of these options, alone or used in combination, can provide important relief.
Home Profile Messages
Welcome powmianotforgotten. Logout
« The Pain Incarnate: PP Weezer
InCharge Logo White and Yellow Login In Search InCharge.org
Reply
« Prev1Next »
powmianotforgotten Avatar
powmianotforgotten
New Member
*
4 minutes ago
Quote
likePost Options
InCharge Logo White and Yellow
Login In
Search InCharge.org
Call Today: (800) 565-8953
Military Debt Relief
InCharge Debt Solutions recognizes that service members from all branches of the US military face unique financial challenges related to frequent relocation, deployment, disability and PTSD. InCharge offers credit counseling 100% free of charge. We’re here to help.
Choose Your Debt Amount
20,000
Call Today: (800) 565-8953
Or Continue Online
Home » Credit Card Debt Relief » Credit Counseling » Military and Veteran Debt Relief
Five Military Debt Relief Programs
Members of the military have plenty to worry about when they are serving our country. The last thing they should have to worry about is if they paid the mortgage and credit card bills this month.
The good news is there are laws that protect servicemembers from many civilian credit worries. The bad news is a lot of military personnel still suffer severe financial difficulties and have a hard time finding debt-relief options. There are programs to help active-duty military and veterans with debt relief. Best to start with the most significant.
Here are five programs designed to help active-duty military and veterans:
Servicemembers Civil Relief Act – This federal law, originally enacted in 1940, regulates interest rates for credit cards, auto loans and other financial services for active-duty military. It also requires landlords to let you out of your lease, without penalty, for deployment. The SCRA has been amended and protections have been added to help with evictions and wage garnishments.
Military Lending Act – Under the Military Lending Act, servicemembers cannot be charged more than 36% interest for credit products.
Veteran’s Housing Benefit Program – This program offers loans to veterans at very low rates.
Nonprofit Credit Counseling– Free financial counseling provided by nonprofit companies like InCharge Debt Solutions.
Debt Consolidation– There are a few options in this category, any one of which could provide the debt-relief solution best suited for your problem.
Whether it’s a debt management program, a debt consolidation loan, debt settlement or, in the most severe instances, bankruptcy – consolidating your debt can ease the strain. Debt can feel unending, but there is a way to seek military financial help and find one of the several ways to consolidate debt.
Servicemembers Civil Relief Act
It’s been around since 1940 and was initially called the Soldiers’ and Sailors’ Civil Relief Act, though its origin dates back to the Civil War. Congress passed legislation that gave relief to soldiers who could not pay their debts while at war. Union privates made all of $13 a month in the Civil War, which was actually $2 more than their Confederate counterparts. That wasn’t a lot, but at least they didn’t have to deal with collection agencies threatening to ruin their credit score. The Servicemembers Civil Relief Act limits those hassles and provides other protections for active-duty personnel. The law bans creditors from proceeding with foreclosures, evictions, garnishments and repossessions and other actions until 60 days after a service member returns from active duty. When service members are called to active-duty, lenders are required to set a maximum interest rate no higher than 6%. Despite such protection, studies show that more than one in four military families carry $10,000 or more in credit card debt, and 10% of families owe $20,000 or more. More than half of enlisted and junior non-commissioned officers reported they often make only minimum payments on their credit cards.
Military & Veteran Debt Consolidation Loan Options
If you are looking for a debt reduction plan, a good place to start would be examining the interest rates you pay on your current bills, especially credit card debt and compare those against the interest rate charges for a debt consolidation loan. One form of debt consolidation is taking out one loan to pay off several smaller loans. It is most often used to eliminate credit card debt because debt consolidation loans should have far lower interest rates and agreeable terms.
For example, depending on your credit history, you could get a debt consolidation loan of 8%-10% interest rate to wipe out credit card debt that probably has reached 25%-30%.
There are several types of debt consolidation loans – personal loan, home equity loan, military debt consolidation loan, balance transfer loan, loan from family or friends – and each has its advantages and disadvantages.
Personal loans: This is the most common form of debt consolidation. You go to a bank, credit union or online debt consolidation lender, ask for the amount you need to pay off credit card debt, they check your credit score and payment history and approve or disapprove your loan. More than 20 million Americans owed over $178 billion in personal loans in 2022, a 24% jump over the previous year. About 3% of personal loans were over 60 days past due.
Home equity loan: This loan has the lowest interest rates for one very important reason: You are putting your home up as collateral. If you miss payments, you could lose your house. In return, you get interest rates as low as 6% compared to the national average of 17.92% for credit cards.
Military Debt Consolidation Loans: If you have a VA loan on your home, you may qualify for a Military Debt Consolidation Loan, which has a lower interest rate than standard civilian consolidation loans. With a consolidation loan, you can pay off all unsecured debts – credit cards, medical debt, payday loans, etc. – and then make one monthly payment to a single lender.
Balance transfer cards: The attraction here is that you pay 0% interest for an introductory period (usually 6-18 months), giving you time to pay off credit card bills at no interest. However, it’s very difficult for people already in trouble with credit cards to qualify for a 0% interest card. If you do qualify for one, you must pay off your debts in the introductory period or your rate soars to 18%-20% or higher.
Family and friends: This could be the place to get the lowest rates and best repayment terms IF both sides trust each other and act responsibly. IF they don’t, this can ruin relationships and be a really bad idea.
If you’re not happy with any of these choices, you could consolidate your debt without a loan through a nonprofit credit counseling agency. Credit counselors walk you through the steps of setting up a monthly budget and then recommend debt-relief options. One of those is a debt management program, which doesn’t require a loan and doesn’t consider credit score as part of the qualifying process. Debt management programs are a good way to eliminate debt, eventually increase your credit score and relieve stress from financial problems. Counselors work with lenders to reduce the interest rate you’re paying and the amount of your monthly payment so that all debt is eliminated in a 3–5-year period.
Homeowners Assistance Program (HAP)
Homeownership is practically a given in the military – 51% of millennials in the military are homeowners – but with that comes another given: There are likely to be problems keeping up with payments. The Department of Defense recognized that and set up the Homeowner Assistance Program (HAP), which provides financial assistance to qualified candidates facing a crisis concerning their housing. HAP covers active service members, veterans, surviving spouses and civilians working in the Department of defense. It provides financial assistance for those facing foreclosure, having to sell their home at a loss or being unable to sell their home, or those dealing with collections agents. Members of the Armed Forces who incur a wound, injury, or illness in the line of duty during deployment (30% or greater disability) also qualify for assistance. Applicants who qualify receive financial assistance under one of three scenarios:
Private Sale: Benefit amount is the difference between 95% of the home’s prior fair market value and the selling price. HAP may also reimburse the applicant for normal and customary seller’s closing costs
Government Acquisition: Benefit amount is the greater of 90% of the home’s prior fair market value OR the mortgage(s) payoff amount
Foreclosure: Benefit is paid to the lien holder for legally enforceable liabilities.
The Military Lending Act of 2006
The Military Lending Act of 2006 limits predatory practices. More relief is offered through the Veterans Administration. The VA home loan program usually looks at only the previous 12 months of credit history unless bankruptcies, tax liens or collections are involved. It also doesn’t require a down payment, and interest rates are typically lower than those offered with conventional loans. Military service members can also get a loan by refinancing their house through the VA. Qualified veterans can use the Interest Rate Reduction Refinancing Loan to obtain a lower interest rate or change from a variable rate loan to a fixed rate. If you want to take cash out of your home equity, the Cash-Out Refinance Home Loans programs lets you replace your current loan with one that has new terms. The danger is your house is collateral and can be foreclosed if you don’t make the payments. Serious decisions like this require careful consideration.
Free Credit Counseling for the Military and Veterans
InCharge Debt Solutions offers free credit counseling to the military and veterans. If you qualify, you may join a Debt Management Plan, which could help you pay off your debt over 3-5 years. Qualifying depends on factors like the amount of debt as well as your income. The easiest way to find out if you qualify is to take part in a free credit counseling session.
Instead of having an array of bills to keep track of, debt consolidation or a Debt Management Plan would mean writing one check per month. Whether that’s the answer or not, there are far better solutions than the quick fixes offered by payday lenders outside of military bases. The last thing a member of the military needs is for bad credit to make them a discredit to the armed forces.
Grants for Active Military and Veterans
The VA has a number of grant programs designed to help veterans and military families deal with everything from finding a permanent residence to gaining access to cultural community events to hiring legal aid to receiving financial aid for a college education. The grant money is generally awarded to local civic and religious groups who then disburse it to veterans and active military. To find the list of available grants for the military service members and veterans, visit these sites:
Grants.gov – This site is part of the Veterans Administration and offers grant information on locations for applying for grants.
GrantWatch.com – Lists grants from all over the country for nonprofits, faith-based organizations and 501 (c)(3) to help veterans with everything from finding a home to technical training for a job.
Finaid.org – This website focuses on grants for veterans and their dependents.
USVeteransMagazine.com – This site, like Finaid, has a long list of places for veterans, service members, their spouses and dependents to check for grants to attend college.
MilitaryBenefits.com – Features a page on 10 benefits that veterans might not know about, including information on long-term care, certification programs and unused GI Bill benefits.
Other Debt Relief Options for the Military
Along with specialized debt relief solutions available to military servicemembers and veterans, there are other options that can be utilized by anyone. All of these options, alone or used in combination, can provide important relief.