Service Members and Money Problems
Veterans and military members are more likely to deal with financial challenges than non-veterans. A survey by The National Foundation for Credit Counseling showed that service members have an increased instance of financial troubles and this carries over to when they are veterans. These include the following issues:
- 77% of service members have financial stresses
- 57% worry about loss of income and job security due to defense cuts
- 28% are more concerned about their finances than they were a year ago
- 55% believe they are not prepared for a financial emergency
- 60% say they have had to turn to non-traditional lenders
- 49% have taken out loans in the past year from sources including payday lenders, friends and family, or credit card cash advances
- Twice as many servicemen as civilians applied for credit cards last year
- 58% carry credit card debt month to month compared to 34% of civilians
- 6% of service members have paid less than the minimum on credit cards compared to 3% of civilians
- 5% obtained cash advances from their credit cards compared to just 2% of civilians
Causes of Veteran Financial Problems
The wars in Iraq and Afghanistan began to close down at the same time that the US economy was struggling. That meant those transitioning from active duty to veteran status struggled to find jobs. 66% of veterans surveyed said that the transition was difficult and roughly 50% were not prepared for the transition. 66% of veterans also said that health problems resulting from their military service impacted their ability to find a job as a veteran and led to financial issues.
The Consumer Financial Protection Bureau (CFPB) is actively concerned with protecting veterans and their families. The CFPB collects complaints and the top three complaints from veterans and their family members include debt collections, credit reporting issues, and student loans. To help combat the financial struggles of affected veterans, the CFPB has launched a financial coaching initiative that placed certified financial coaches at Department of Labor American Job Centers around the country.
Financial Solutions for Veterans
For service members and veterans struggling with debts they cannot pay, there are legal remedies available that offer relief and peace of mind. The Service Members Civil Relief Act (SCRA) offers military personnel protections and privileges as it relates to debt, debt collections, interest rates, and collection lawsuits, among other issues. Further, other state and federal consumer rights laws provide additional protection for service members, veterans and civilians alike against abusive debt collectors, including illegal contacts to a service member’s chain of command.
And for those service members and veterans whose debts are so great that they cannot afford to pay them? Bankruptcy can help protect the security clearance of those who are on active duty or are veterans working in a civilian position that requires a clearance. Chapter 13 bankruptcy offers time to catch up on past due bills while Chapter 7 offers complete discharge of most unsecured debts, including credit cards, medical bills, and most collection accounts. Additionally, there are student loan plans and foreclosure prevention programs that can help prevent loss of homes, garnishment of wages or further damage to credit scores and security clearance.
Contact the Law Offices of John T. Orcutt for Veteran's Assistance
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