Everything is a Mess With Navy Federal Credit Union. – Lesley

“Dear Steve,

Everything is a mess. Another navy federal question. I owe over 18 thousand to NFCU and around 7 thousand to other credit cards, My husband owes around 20 thousand to credit cards 6 of that is to NFCU. My husband has ended up in a nursing home. He has only retirement income. We have a medicaid trust set up and they take half of his income for the nursing home per medicaid rules. I have a limited community spouse amount which is the other half of his retirement income and barely enough to meet my monthly obligations. NFCU has been after me. I agreed to try and pay 120 a month for 12 months and they were suppose to take the interest down to 0-3% which now they say will be 6% well 6 percent on over 18 thousand is like interest only payment.

I told them I need help to pay the principal down and please use the 120 a month to do that instead of all interest. I have already paid over 1,600 in interest this year alone before we fell on hard times. They said unless I can pay 180 a month which I cannot do right now they will not move the interest down. I said I will not pay the 120 a month then.

My husband will not be coming out of the nursing home he is there permanently. Navy says they will take legal action. I want to pay them something and things might be better financially in a year but they won’t work with me except for the terms they insist on.

We had excellent credit before and paying all our bills on time. My only other option is bankruptcy for me which I did not want to do to nfcu as we have been with them over 25 years. We own a modest home. Have one 2004 car and no other assets to speak of.

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How can I get Navy to work with me on this debt of mine? I do not want a lien on our home. I am afraid of loosing my car although it is paid for. Help. then I need to decide how to handle my other credit cards or just claim bankruptcy.



Dear Lesley,

This is a situation where long term debt was created but life just didn’t cooperate with you. It is unfortunate that your husband is now limited to the nursing home and I’m sure there have been some dramatic income changes along the path to that point.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Unfortunately there is nothing you can do to force NFCU to work with you. Well, except for one thing, bankruptcy.

As much as you want to avoid it, bankruptcy is a legal process that provides some protection and rights for the debtor. And I know you feel an allegiance to NFCU, after being with them for 25 years but shouldn’t that be a two way street? It does not sound like they are providing much value in the past relationship with you. That is not a justification, just an observation.

I think at this point, be it $120 a month or $180 a month, there is not much of an expectation that you are going to be able to afford or service the debts of both you and your husband in your situation. Any monthly payments you send now will be essentially worthless if you can’t ultimately pay off all the debt.

Your homework is to find a local bankruptcy attorney you like, make an appointment and go in and talk to them about what bankruptcy and its associated legal protections would mean for you.

Please update me on your progress by

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Damon Day - Pro Debt Coach

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