Debt Help for Veterans: Solutions to Ease Financial Struggles

The rising cost of commodities and necessities due to inflation and uncertain economic times caused many Americans to experience financial uncertainty and growing debt. Unexpected healthcare costs, expenses, or repairs often lead many people to put these expenses on credit cards or take out loans to afford them. As a result, many individuals find themselves burdened with mounting debt that they struggle to repay. The Veterans Administration (VA) offers debt relief programs for Veterans to help Servicemembers and Veterans avoid these problems, particularly with assistance programs towards healthcare, education, home loans, and other benefits. For this reason, the VA provides a multitude of services and debt relief for Veteran programs designed to help military personnel eliminate or reduce their debt. This article examines some of these debt relief programs for Veterans, including who is eligible and how to apply for them.

General Debt Relief for Veterans

Many financial institutions offer debt relief for Veterans by placing a freeze on loan repayments while someone is serving in the military, but many others do not. It is important to have the correct resources and information before starting a debt relief program of any kind, especially debt relief programs for Veterans designed to help Veterans get out of debt.

Finding the Right Resources

It is important that you get the correct information about Veteran debt assistance programs before deciding which one you qualify for. If you have any immediate questions, speaking to a resource officer at your local VA regional office is the first place to start. This officer can direct you to the appropriate resources and debt relief programs for Veterans for your particular situation. You can also speak to a financial attorney who specializes in debt relief for Veteran programs, or a financial resource officer at your bank or credit union.

To begin your research on Veteran help with debt programs, consider the following options:

• Visit the VA Debt Relief website
• Call the VA Financial Assistance Department at 800-827-0648.
• Visit your regional VA office.

Debt Relief for Veterans: Programs and Services Available

The VA offers several debt help for Veterans options, some of which include:

• Repayment plans: If you are unable to pay your entire balance, you have the option to request smaller monthly payments.
• Monthly offsets: The VA can withhold part or all of your benefit payments to pay off your debt.
• Compromise offers: If you don’t receive monthly benefit payments, you can offer a one-time lump sum payment, often less than the full amount owed.
• Waivers: You can ask for the forgiveness of all or part of your debt.
• Temporary benefit suspension: Suspension of benefit debts without paperwork.
• Financial hardship assistance: You can request help with co-pay bills or other types of debt by requesting a raise or making a compromise offer.
• Service loan forgiveness: If you meet certain requirements for debt help for Veterans, you may be able to have your outstanding debts forgiven. 

Keep in mind that certain VA debt assistance programs exclusively cover debts owed to the VA, including any benefits claimed or VA home loans. You might owe money to the VA for a variety of reasons, most commonly a mistake with benefits. If you fail to report a life change that alters your eligibility due to an error, you may also accrue debt to the VA. Failure to manage your debt can lower your credit score, making it harder to get loans and adding interest to your debt. The US Treasury receives any loans or debts owed to the VA after 120 days, at which point it may impose additional fees and interest, garnish your wages, or refer your account to a private collector. Veteran help with debt programs usually focus on debt owed to the VA itself, so if you need help with other forms of debt, VA debt assistance for Veterans programs might not help you much.

How Debt Assistance for Veterans Can Alleviate Financial Stress

There are many ways in which debt assistance can take away some of the burden of financial stress for Veterans who owe outstanding amounts, especially debt relief for active duty military who are deployed. Some debt relief for military personnel programs can provide the following benefits:

• Consolidating debt: Veterans can consolidate any high-interest debts into a single loan with a lower interest rate.
• Refinancing a mortgage: Veterans might consider using their home’s equity to refinance their mortgage and pay off other debts at a lower interest rate.
• Get a VA home loan: VA home loans have no down payment requirement, lower interest rates, and limit closing costs. It is possible to roll an existing mortgage from a private lender into a VA loan that might result in lower monthly payments and lower interest rates.
• Financial assistance grants: Some individuals may qualify for grants that provide essential needs and debt help for Veterans without requiring repayment.
• Financial planning services: The VA offers free financial planning services to Veterans of certain insurance programs through Veteran help with debt programs. Some of these debt help for Veterans programs include credit counseling, tax preparation, and homelessness prevention.

Help Veterans Get Out of Debt: Tips and Strategies

There are many strategies that work well for helping anyone get out of debt, especially Veterans. Some of these include:

• Create a budget: When you know how much money you have coming in and what expenses are causing money to go out, then you can more easily see where you might maximize your savings.
• Counseling services: These services help develop healthy spending and saving habits designed to help you pay off your debt and avoid costly interest.
• VA financial assistance programs: The VA offers many debt help for Veterans programs for different areas that often incur debt, such as medical and educational expenses.
• Consolidation options: Servicemembers might make use of VA-backed loans to consolidate costly debt into one lower-interest loan with a lower monthly payment.
• Debt settlement: There are some debt settlement options with reputable companies that help you lower your payments, write off part of your debt, or eliminate them entirely.

Debt Forgiveness Programs

Depending on your circumstances, creditors may agree to forgive some or all of your debt through some VA debt help and VA debt forgiveness programs. Many debt forgiveness programs exist, some specifically targeting the military, but it’s crucial to thoroughly research them to prevent scams. There are many legitimate organizations geared towards Veteran help with debt programs designed to help Veterans get out of debt.

Debt Forgiveness for Veterans: What You Need to Know

Veterans might be eligible for debt forgiveness through a variety of programs. Some of these include:

• Public service loan forgiveness (PSLF): This program forgives the remaining balance on a direct loan after 120 qualifying monthly payments while you are also working full-time for an eligible employer.
• VA debt waiver: This program forgives part or all of a debt if the Veteran can’t afford to repay it. In order to request this waiver, a Veteran must submit VA Form 5655 and a personal statement explaining why they should not have to repay the debt.
• Chapter 7 bankruptcy: This form of bankruptcy liquidates any non-exempt assets to pay off debt creditors, discharging most unsecured debts. However, keep in mind that bankruptcy stays on a credit report for 10 years, adversely affecting credit scores and future loan eligibility.
• Total and permanent disability discharge: Servicemembers can apply for debt discharge due to a disability. To do this, call 888–303–7184 for assistance.

Disabled Veteran Debt Forgiveness: Tailored Support Options

If a Veteran or Servicemember is disabled, especially due to a service-related disability, there are several more options beyond those already mentioned for debt forgiveness.

• Disabled Veteran debt relief: The VA is more likely to grant a compromise offer or waiver if the Veteran is disabled and unable to work.
• Military debt consolidation loan: This partially guaranteed VA loan allows Veterans with a VA home loan to refinance their loan and use the difference in cash to pay off other debts.
• Grants: Some organizations, such as the Veterans of Foreign Wars and Operation Family Fund, provide grants to military families who might be experiencing financial difficulties.

Understanding Veteran Debt Forgiveness Programs

The main role of a Veteran debt relief program is to help you explore options that lower your monthly payments and make it easier to get out of debt. It is important to speak with a financial assistance officer who can point you in the right direction and tell you which programs to avail yourself of for your particular situation. Using reputable debt assistance programs and organizations can help Veterans get out of certain debts such as credit card debt, student loans, medical bills, and debts already in collection. However, not every Veteran debt assistance program will apply to every type of debt. Some home and auto loans are not covered, as an example.

For more information on individual VA debt relief programs, call 800-827–0648.

Is Debt Forgiveness for Disabled Veterans an Option for You?

Before embarking on any debt relief program, you should carefully research your options that are available to you. You might discover that private debt relief programs, or those offered by your financial institution, may provide a more favorable situation than those offered by the VA. Typically, you must meet one or more of the following requirements to qualify for the various disability debt relief programs and debt help for Veterans programs offered by the VA:

1. You have a medical diagnosis and claim disability based on a service-related disability or disability incurred while training for active duty.

2. You qualify for other VA disability benefits.
3. You have total and permanent disability discharge status.
4. You qualify for disability debt relief grants. 

Specialized Debt Assistance (Grants and Specific Cases)

Under certain and specific circumstances, Veterans might qualify for specialized debt assistance in the form of grants or debt write-off. Both the VA and nonprofit organizations help with VA debt forgiveness as part of VA debt help programs they offer. Some resources for Veteran debt assistance include:

• MCL: This is a specialized loan program that consolidates high-interest debts into a single loan with a lower interest rate. The VA guarantees it, but the value cannot surpass the appraised value of your home, which serves as collateral.
• VA debt management program: You can request debt management assistance after sending in a financial status report, VA Form 5655, and a personal statement explaining your situation.
• Service Member Civil Relief Act: This federal law regulates interest rates for active-duty military members on credit cards, auto loans, and other financial services. Additionally, it mandates that landlords must release you from your lease without any penalties if you are on deployment.
• The American Legion Organization: They offer a temporary financial assistance program that awards cash grants to help qualified applicants cover the cost of shelter, food, and utilities.
• USA Cares: The military assistance response program helps Veterans with bills for military service incidents.
• Operation Family Fund: This is a private nonprofit that provides grants to Veterans who are disabled during Operation Iraqi Freedom and beyond. 
• Operation First Response: Provides financial assistance to Veterans while they go through the VA claim process.
• Veterans of Foreign Wars: Provides grants up to $2500 to active duty Servicemembers and their families experiencing financial difficulties.

Grants for Veterans to Pay Off Debt: A Step-by-Step Guide

VA debt relief loans must be paid back, but Veteran debt grants do not. Also, many grants to help Veterans get out of debt are tax free. The process for applying for VA debt help grants and programs to pay off debt will vary depending on the program you are applying for. Generally, you need to follow these steps:

1. Veterans can apply for medical debt relief online or by calling the Health Resource Center at 866-400-1238.
2. Servicemembers can call the Debt Management Center at 800-827-0648.
3. To apply for the debt help for Veterans waiver, first download and fill out VA Form 5655 Financial Status Report, write a personal explanation as to why you are seeking debt forgiveness, and submit it to the VA regional office. 
4. Applicants to the Military Family Assistance Fund must provide copies of their DD214 discharge papers, a valid photo ID or military ID, proof of residency, current earning statements, monthly bills such as rent or mortgage, any eviction or disconnection notices, and, if the spouse of a Veteran, proof of relationship. Submit this along with any other required documentation.

Disabled Veteran Debt Relief Grants: Eligibility and Application Process

If you are a Veteran with disabled status, particularly due to a service-connected condition, you likely qualify for both federal and state-level debt help for Veterans grants. There are also several nonprofit grants available for disabled Veterans, such as the Wounded Warrior Project. 

Federal grants aren’t exactly a government debt relief program, but the VA supports Veterans in need through grants for organizations that support disabled Veterans, grants directly to disabled vets, and housing for homeless Veterans.

State grant programs are available for Veterans, such as financial assistance for families of active-duty Servicemembers, those deployed, general debt help for Veterans and those who have experienced a drop in income.

Nonprofit grants from charities to Veterans struggling with debt, such as the USA Cares program and the Wounded Warrior Project, are some options. 

Each of these possibilities has its own eligibility requirements, but almost all of them require a copy of your DD214 forms, a photo ID, medical evidence of disability, and copies of your tax statement or proof of income as well as monthly bills.

Exploring Military Debt Grants for Veterans in Need

Primarily, VA debt relief programs are meant to only be for hardship from debt incurred by VA programs and benefits and not for consumer debts. However, the Service Member Civil Relief Act and the Military Lending Act provide financial protections against predatory practices targeting military members for consumer debt. That being the case, Veterans in need should look at the possibility of moving private and consumer debt into a VA-backed loan where they can then work with the VA debt relief assistance programs. The following organizations provide assistance with this process and offer grants to Veterans in need: 

Operation Family Fund

Operation First Response

USA Cares

How Debt Relief Grants for Disabled Veterans Can Make a Difference

Veterans with disabilities already have to navigate a world that does not cater to them. Those who became disabled and served in the defense of the country must now continue through life with their disability, which might make it difficult for them to earn livable wages, maintain a home, or support their families. Lifting the burden of financial stress allows the disabled Veteran to tackle other daily life issues. Debt relief for disabled Veterans helps them heal and move forward with civilian life.

Credit Card and Loan Debt Solutions

Credit cards and student loans are the primary sources of debt for many Americans. Frequently, high interest rates compound when the debt remains unpaid, potentially leaving the borrower with an unexpected debt due to escalating interest. Credit card relief for Veterans and loan debt solutions for Veterans are one way to curtail a large loan, enabling them to pay it back more easily with lower interest rates and lower monthly payments. Veteran credit card debt relief programs from reputable organizations can help manage this form of debt.

Veteran Credit Card Debt Relief: Strategies to Lower Balances

The first step in managing credit card debt through a Veteran credit card debt relief program is to address its underlying causes. Many people facing an unexpected large expense either take out a loan or put the expense on the credit card in an effort to deal with the problem right away. However, unhealthy spending practices and the inability to pay off the loan in a timely fashion mean that the debt often grows over time. Here are some tips to address credit card debt before paying it down. 

• Pay more than just the minimum: One of the simplest ways to tackle credit card debt is to pay more than the minimum required payment each month.
• Negotiate with creditors: Many people do not realize that credit card terms are often negotiable, and if you are struggling to pay down the balance on a high-interest credit card, try reaching out to the credit card company to see if they will lower your interest rate, reduce minimum payments, or remove limit fees.
• Enlist professional help: Utilizing professional help through a debt management program is one way to get your credit card debt under control. When you enroll in these plans, the counseling agency works on your behalf with your creditors to lower or even eliminate fees or the entire debt.
• Transfer your balance: Consider transferring balances from high-interest credit cards to lower-interest credit or debt consolidation loans.

Credit Card Debt Forgiveness for Disabled Veterans: What to Expect

Negotiating debt forgiveness with creditors can be a nerve-wracking experience, but they might be willing to work with you if you are a disabled Veteran, especially if you are enrolled in a Veteran credit card debt relief program. However, if you are facing bankruptcy or other hardship due to your disability, it is entirely possible to get a creditor to partially or completely erase a debt. Disabled Veteran credit card debt is often written off as part of programs for debt relief for 100% disabled Veterans. Whether you choose a debt relief company or a hardship program, they will inquire about your disability status, Veteran status, monthly income, and expenses. They will also request you to submit any proof of disability, notices of eviction or cut-off, or other items that suggest you may be considering bankruptcy.

Debt Consolidation Help for Veterans: Pros and Cons

While many debt consolidation programs do indeed benefit participants, they are not without their challenges. A consolidation loan is a good idea if you are committed to paying off the full amount of your debt consolidation loan, you have incoming cash to cover your payments, you are fine with repaying the loans over a longer period of time, and you have financial plans to avoid debt in the future. Debt consolidation can help you pay off debt faster and rebuild credit. However, the drawbacks of debt consolidation include the possibility of not qualifying for a low interest rate, the possibility of additional fees, the potential for worsening circumstances if you miss a payment, and the inability to address the root cause of your debt. Debt consolidation might also temporarily hurt your credit score in the short term, and there are, unfortunately, a multitude of scam agencies out there taking advantage of desperate people looking to consolidate their debt. Make sure you research the company you go with and that it is reputable, especially when looking for a Veteran credit card debt relief program designed to help Veterans get out of debt.

Disabled Veteran Credit Card Forgiveness: Your Questions Answered

Many people have questions about credit card forgiveness, especially disabled Veterans who might be going to a fixed income. To begin with, you should understand that credit card debt forgiveness might negatively impact your credit score, depending on the details of your debt settlement agreement. This might affect your ability to get a loan in the future. There are also tax implications, as a discharge of $600 more of your debt requires a report to the IRS. You may receive a 1099-C tax form and be required to pay taxes on the forgiven amount if you enroll in a Veteran debt forgiveness program.

VA-Specific Debt Relief

Remember that VA-specific debt relief programs apply primarily to debt incurred from VA benefits and programs, such as overpayment of benefits or failure to repay certain medical copayments.

VA Debt Relief Programs: What They Offer

The VA offers several different programs to help Veterans get out of debt, including:

• Repayment plans: This allows Veterans to pay off their debt with smaller monthly payments.
• Compromise offers: This allows Veterans to offer a one-time lump sum payment instead of a monthly payment.
• Waivers: Allows Veterans to request that part or all of the debt be forgiven.
• Temporary hardship suspension: Allows Veterans to temporarily pause debt collection due to circumstances such as deployment, natural disaster, or other financial hardship.

VA Debt Forgiveness: Understanding the Process

Depending on the amount of debt you owe, the nature of it, and your reasons for not being able to pay it back, the process of reducing your VA debt through debt forgiveness may take some time. Once you submit your VA Form 5655, compose a personal statement outlining your inability to repay the debt, and request an oral hearing, the VA will issue a statement of their decision within 30 days. You also have the option to request a compromise offer, which, if accepted by the VA, requires payment within 30 days as part of your Veteran debt forgiveness program. The VA Management Center offers information on debt settlement, debt forgiveness for Veterans and your rights under the SMCRA, as well as answers to any questions you might have. For additional debt forgiveness for Veterans process questions, call 800–827–0648.

How VA Home Loan Debt Forgiveness Can Help Veterans

The VA has many programs in place to help Veterans avoid foreclosure, especially on properties backed by a VA home loan. Defaulting on mortgage payments can result in the lender taking your home. This process is called foreclosure. VA technicians can assist you in avoiding this process by securing a pause on your foreclosure, reducing your monthly payments and interest rates, and facilitating a complete refinance. Typically, the VA considers discharging any debt through the public service loan forgiveness program, provided you’ve made 120 monthly payments while working full-time and showing good faith attempts to pay back your debt. Through programs such as VASP, the Homeowners Assistance Fund, and the CARES Act, the VA does not necessarily forgive home loans or debt incurred through mortgages, but it does have several programs in place to prevent foreclosure and assist those with VA-backed home loans in continuing to pay off their mortgages and not lose their homes. These form an overall debt relief for Veterans and debt assistance for Veterans network.

Medical Debt Relief Through VA Programs: What You Should Know

The VA helps Veterans deal with medical debt through a variety of VA medical debt relief programs, debt forgiveness for Veterans and 100% disabled Veteran debt relief initiatives, especially if it was incurred while utilizing the VA healthcare system.

• Repayment plans: The VA allows you to set up monthly repayment plans if you cannot pay back your balance in full at one time.
• Waivers: If you are experiencing financial hardship that would keep you from making monthly payments, you can request that part or all of the debt be forgiven as part of a disabled Veterans debt forgiveness program.
• Dispute: If you think the debt is an error, you can get a dispute on the medical expense that you think should have been covered.
• Request VA financial hardship assistance: If you continue to receive new charges on your medical debt, call 1-866–400–1238 to request assistance.

Frequently Asked Questions