How to Settle a Debt with Navy Federal

Sarah Edwards | January 04, 2023

Navy Federal Credit Union is the largest credit union in the world. Prior and current service members of the U.S. Armed Services and their families can hold accounts at one of its many branches.

While the credit union initially served members of the U.S. Navy, it is now open to all service members, civilians, and contractors who work for the U.S. Department of Defense.

Having an account with Navy Federal entitles you to certain benefits, including low-cost loans and credit cards. You can also get a mortgage or home equity line of credit (HELOC) as a Navy Federal member.

However, sometimes people face unexpected difficulties, and they can’t make payments on their Navy Federal credit card or loan. If you find yourself unable to satisfy your obligations with your Navy Federal debt, you have a few options. You can attempt to set up alternative payment arrangements, get a debt consolidation loan, or settle the debt.

Here’s how.

Set up payment arrangements with Navy Federal

If you’re missing payments or not abiding by the terms of your loan agreement, Navy Federal has already taken notice. You’re probably already receiving phone calls or letters from them.

If your problems have only been going on for a few months, you can attempt to negotiate alternative payment arrangements with Navy Federal. Call them and explain your situation. If you’re currently unemployed or have other financial difficulties you are attending to, Navy Federal may agree to grant you a forbearance for a short period.

If Navy Federal can’t give you a forbearance, you can ask them to lower your monthly payments. Lower monthly payments can give you a little extra room while you’re dealing with extenuating circumstances.

Consolidate your loan with Navy Federal

Debt consolidation is also an option. Debt consolidation involves obtaining a special loan that you use to repay all of your outstanding debts. If you have multiple debts you can’t seem to pay down, debt consolidation can reduce your interest costs and allow you to pay off your debts more quickly.

The best debt consolidation loans have low interest. However, you’ll need a good credit score to qualify. If you don’t have a good credit score, you may still be able to get a debt consolidation loan, but the interest rate will likely be higher.

You can compare the debt consolidation offer to the interest rates on your other obligations to determine whether it will bring you any savings.

Debt consolidation is preferable to other options that can damage your credit score, like stopping payments or declaring bankruptcy. But be careful not to run up the balance of your paid-off credit cards and adopt healthy financial habits as you move forward.

Should I settle my debt with Navy Federal?

Settling your debt can allow you to save money by paying less than the total amount of the obligation. You’ll also eliminate future interest charges.

There are two times when you can settle a debt with Navy Federal: when you stop making your regular loan payments or when Navy Federal attempts to sue you for an unpaid balance.

If you’ve recently stopped making payments to Navy Federal and have the savings available to make a settlement offer, you can attempt to negotiate with them. Offer to pay 50% of the total balance in exchange for release from the remaining balance of your loan.

Remember that Navy Federal is under no obligation to accept your offer. They can decline it altogether or provide a counteroffer. However, if they see you’re struggling, they may be more willing to take your settlement offer.

Settle your debt with Navy Federal if they are suing you

If you’ve received notice that Navy Federal is suing you, debt settlement is still an option. In fact, you can reach out to settle a debt with Navy Federal at any stage of the lawsuit process. Here’s how.

Your first step is to file an Answer in response to the Complaint filed by Navy Federal. Respond to each of the claims from Navy Federal. While you plan to negotiate a settlement, an Answer prevents the court from giving Navy Federal a default judgment against you.

Take stock of your current finances to determine what you can afford to offer Navy Federal in exchange for a settlement agreement. It’s best to begin with at least 60% of the value of your debt. For instance, if you have an unpaid credit card with Navy Federal for $3,000, you can offer them $1,800 to settle the obligation.

Since you won’t have much time to arrange a settlement with Navy Federal, you should handle the process via email. Email gives you a written record of the negotiation while keeping the communications instantaneous.

How can I start the debt settlement process?

Once you’ve determined how much you can afford to pay off, send Navy Federal your initial offer. Your message might sound something like this:

“Dear Navy Federal,

I would like to offer a lump-sum payment of $___ to settle the debt associated with case number ____. Please let me know if you accept the offer, or if you’d like to counter.

Please do not contact me in any other way than by responding to this message. I'm prepared to litigate this matter and win in court. I’m also prepared to file an FDCPA complaint.”

The team at Navy Federal will review your email and determine whether your offer is adequate to settle the debt. If it’s not, they will likely provide you with a counteroffer.

You may go through several rounds of counteroffers with Navy Federal. Don’t worry, it’s part of the process. Keep a calm mind and consider your responses before sending a reply to any counteroffer.

As you correspond, be careful to avoid sharing sensitive information, including bank account numbers, and be wary of sending ACH transfers. Once you reach an agreement with Navy Federal, be sure to get the details in writing. This can save you from any trouble should they change their mind or forget the terms and conditions of your settlement.

If you’re not sure how to handle the negotiation process, a SoloSettle can help.

Settle your debt on your own with SoloSettle

SoloSettle, powered by Solosuit, is a tech-based approach to debt settlement. Our software sends and receives debt settlement offers on your behalf and helps you negotiate the best deal for your circumstance. Once an agreement is reached, SoloSettle helps you manage the debt settlement agreement documentation and forwards your payment to Navy Federal for you, helping you protect your personal financial information.

To learn more about how to negotiate your own debt settlement, check out this video:

Check out this review from a real SoloSettle customer:

“I'm very thankful for SoloSettle. Having a third party negotiate the settlement was instrumental in resolving this case and saved me from two giant headaches: 1) I didn't have to deal with the plaintiff's lawyer and 2) I didn't have to go to court. I also love that the payment was processed through SoloSettle. I was nervous about sharing my personal financial data with the other side, but SoloSettle protected that for me. I hope I never get sued again, but if I do, I would use SoloSettle again in a heartbeat.”

Now, let’s look at an example of how to settle a debt with Navy Federal.

Use SoloSettle to settle your debt on your own.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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