Military & Veteran Debt Relief Options
Last Updated on January 27, 2023 by Andrew
Military service can be incredibly rewarding, but it can also be a source of financial stress. Between deployments, relocations, and the unique challenges of transitioning back to civilian life, veterans and active service members may find themselves struggling with mortgage payments, auto loans, and credit card debt. One of the most important things for veterans and active service members to know is that they are not alone in their struggles. There are a number of Military & Veteran debt relief options available to them.
Credit Counseling
One option is to work with a credit counseling agency. These organizations can help veterans and active service members understand their financial situation, create a budget, and develop a plan to get out of debt. They can also help negotiate with creditors to lower interest rates and create more manageable payment plans.
Debt Consolidation
Another option is debt consolidation. This can involve taking out a single loan to pay off multiple debts or using a balance transfer credit card to consolidate credit card debt onto a single card with a lower interest rate. Consolidating debt can make it easier to manage payments, and may help reduce the overall amount of interest paid on the debt.
Debt Relief
Veterans and active service members may also be eligible for special debt relief programs provided by the government or the military. For example, the Department of Veterans Affairs (VA) provides financial assistance to veterans who are struggling with mortgage payments. This veterans’ debt relief assistance can take the form of military grants for debt or loans to help veterans pay their mortgages or make home repairs.
In addition, the Servicemembers Civil Relief Act (SCRA) provides a number of protections to active service members when it comes to debt, including capping the interest rate on credit card debt and other loans at 6% while on active duty, and protection against eviction and foreclosure.
Student Loans
For veterans and active service members who have student loan debt, the military also offers some relief options. For example, the VA has a program that provides veterans with a refund of the VA funding fee for VA home loans if they later use their VA home loan benefit to refinance their mortgage.
Furthermore, active-duty military members may qualify for the Department of Education’s Military Service Deferment Program, which allows them to temporarily postpone loan payments without accruing interest on their Direct Loans or Federal Family Education Loan (FFEL) Program loans.
Debt Management Plan
Finally, veterans and active service members who are struggling with credit card debt may be able to find relief through a debt management plan. A debt management plan is a formal agreement between a consumer and their creditors to pay off the debt over a period of time. The plan can include lower interest rates and more manageable payment terms, making it easier for veterans and active service members to pay off their debt.
It is worth noting, while debt relief options can be helpful, they are not a magic solution, and veterans and active service members will likely need to make sacrifices to get their finances back on track. This may involve cutting back on expenses, finding a higher-paying job, or even seeking out additional income through side hustles or other work.
Additionally, veterans and active service members should also be aware of potential scams and predatory practices that target individuals in financial hardship. Always be wary of companies that promise to “erase” your debt or claim they can settle your debts for a fraction of what you owe. Such offers are often too good to be true and can put you in an even worse financial situation.
In Summary
Veterans and active service members who are struggling with debt have a number of Military & Veteran debt relief options available to them, including credit counseling, debt consolidation, government and military-specific debt relief programs, and debt management plans. By working with a financial professional and exploring all the options available, veterans and active service members can take the steps necessary to get out of debt and get their finances back on track.
