Navy Federal Credit Union is the largest credit union in the United States. Its membership base is exclusively comprised of active-duty service members, veterans, Department of Defense employees, and their families. For those who have been served with a Navy Federal debt collection lawsuit, it can be an intimidating and overwhelming experience. However, you have legal options to resolve the lawsuit favorably if you act quickly. Below, our Texas debt collection defense attorneys discuss what to know and do about being sued by Navy Federal Credit Union.
What Is Navy Federal Credit Union?
Navy Federal Credit Union, often called Navy Federal of NFCU for short, is the largest credit union in the United States. As mentioned above, NFCU members exclusively consist of active-duty service members, veterans, immediate family members within military families, and Department of Defense employees.
NFCU was founded in 1933 by seven Navy Department employees. As a credit union, NFCU is member-owned and not-for-profit. It offers a wide range of credit card and loan options to its members, including:
- Credit cards
- Personal loans
- Auto loans
- Motorcycle, boat, and RV loans
- Mortgage loans
- Home equity loans
- Student loans
Is Navy Federal a Debt Collector?
Navy Federal Credit Union is not a third-party debt collector. It is considered an original creditor. When it pursues debts from its members, it acts as the original creditor rather than pursuing debts on behalf of another company. However, if Navy Federal is suing you, you will likely hear from Navy Federal’s lawyer.
Navy Federal often turns its debt accounts over to debt collection law firms specializing in pursuing debts. For its Texas cases, it usually works with the following law firms:
- Javitch Block, LLC
- Rausch Sturm LLP
- Scott & Associates, P.C.
- The Sayer Law Group, P.C.
Does Navy Federal Sue for Debt?
Navy Federal has a history of filing lawsuits against its members with delinquent accounts, either from defaulted credit cards, personal loans, auto loans, or other credit options the credit union offers. It may also sue when a deficiency remains after a car repossession. For example, if Navy Federal repossesses a vehicle and sells it for less than the member owes on the loan, NFCU may sue for the remaining balance.
When Navy Federal sues, it will typically pursue more than just the alleged outstanding debt. It will likely seek the claimed debt, accrued late fees, interest, court costs, and legal fees.
What to Do if Sued by Navy Federal Credit Union
If Navy Federal is suing you for debt collection, we recommend acting quickly to protect yourself from a default judgment. A default judgment occurs when you do not respond to the lawsuit or appear in court. The judge may rule in Navy Federal Credit Union’s favor by default, meaning the creditor automatically wins the case. Here are a few steps that you should take if facing a Navy Federal debt collection lawsuit:
1. Consult an Experienced Texas Debt Collection Defense Lawyer
From the beginning, a Texas debt collection defense lawyer can help you understand your situation. At Warren & Migliaccio, we provide a free consultation to discuss your situation, answer your legal questions, and help you determine your next steps.
When you hire us for your case, we will handle the legal process for you. For example, a few ways we can help include:
- Draft and file your Answer to avoid a default judgment
- Request debt validation from Navy Federal Credit Union
- Investigate the claims against you to identify weaknesses
- Identify valid defenses for your case
- Help you assess the legal options for your case
- Execute the best legal strategy for your case to resolve it, whether seeking case dismissal, negotiating a settlement on your behalf, fighting the lawsuit in court, or seeking bankruptcy protections
2. Respond to the Lawsuit
An Answer is your official written response to the lawsuit. In it, you must respond to each of Navy Federal’s claims against you. You can also highlight any legal defenses you may have to the lawsuit. By filing an Answer, you prevent a default judgment while you evaluate your legal defenses and options for moving forward.
It is important to act quickly because you only have 14 to 20 days to respond to the lawsuit. Missing the deadline or failing to follow court procedures can lead to a default judgment against you.
3. Assess Your Legal Options
The best course of action for your case will depend on your financial situation and the strength of NFCU’s case against you. A Texas debt defense lawyer can help you evaluate your legal options so you can make an informed decision.
Generally, however, your legal options may include:
- Seeking case dismissal. If you have strong defenses to the lawsuit, such as an expired statute of limitations or mistaken identity, you can seek a case dismissal.
- Negotiating a settlement. A settlement may be in your best interest if NFCU has a strong case against you, you recognize the debt, and you want to avoid court. In many cases, you may be able to negotiate a lower lump-sum payment or a manageable payment plan.
- Fighting the lawsuit. Even if you cannot get the case dismissed, you may have a strong enough defense to fight the lawsuit in court. However, going to trial will prolong the resolution of the case. We can help you determine whether fighting the lawsuit is in your best interest.
- Seeking bankruptcy protections. If your financial situation is too overwhelming to manage, filing for bankruptcy may be a viable option. Depending on the type of bankruptcy you seek, you may be able to discharge your unsecured debts or restructure your debt under a court-approved plan. Bankruptcy also immediately halts collection efforts, including lawsuits.
Can Navy Federal Garnish Wages?
In Texas, Navy Federal Credit Union generally cannot garnish your wages. Texas law does not allow wage garnishment for consumer debts like credit card debt or personal loan debt. Texas only allows wage garnishment for child support, spousal support or alimony, and certain federal debts.
However, this exemption does not mean that Navy Federal does not have other options to pursue the alleged debt. If NFCU secures a judgment against you, it may take further action to collect, including:
- Bank garnishment. Texas does allow bank garnishment for consumer debts. Bank garnishment means freezing and seizing funds from your bank accounts to pay off the debt. Even though Texas does not allow wage garnishment for consumer debts, once your paycheck hits your bank account, it is no longer considered current wages and can be seized.
- Property liens. Navy Federal cannot place a lien against your homestead property or principal residence. However, it may be able to put a lien against any nonexempt or secondary properties you own. You cannot sell, refinance, or transfer the property until the creditor removes the lien.
- Property seizure. Beyond placing liens on your property, Navy Federal may pursue the seizure of your nonexempt personal property to pay off the debt.
Additionally, a judgment is valid for 10 years in Texas and can be renewed. Navy Federal would have at least a decade to come after the money.
Does Navy Federal Settle Debts?
Before trying to settle with Navy Federal Credit Union, we recommend consulting an experienced Texas debt collection defense lawyer. You may have better legal options available to you based on your unique situation.
However, there are a few reasons why seeking a settlement may be the course of action you want to take. For example, these reasons may include:
- You recognize that you owe the debt
- Navy Federal has strong evidence against you
- You want to avoid going to court
- You may be able to pay less than what you owe
Navy Federal Credit Union may be open to a settlement to resolve your case. Creditors are generally open to settlements to avoid the costs, resources, time, and risk of going to court. In many cases, they would prefer to recover some of the debt quickly than move forward with litigation.
Generally, a debt settlement will happen in one of two ways: a lump-sum payment or a payment plan. You may be able to settle for much less than the alleged debt if you can pay a lump-sum payment. However, if you cannot pay a lump-sum payment, you may be able to negotiate a structured payment plan that works for you.
Schedule a Free Consultation With a Texas Debt Collection Defense Lawyer From Our Firm
At Warren & Migliaccio, we defend and represent individuals across Texas facing debt collection lawsuits by creditors and debt collectors. We have significant experience and success going up against the country’s largest creditors and debt collectors. If you are facing a Navy Federal lawsuit, do not hesitate to learn more about your legal options and how we can help you put the lawsuit behind you.
During a free consultation, we can review the claims against you and help you understand your situation. We will also discuss your potential legal options for moving forward so you can make informed decisions about your case. Call us at (888) 584-9614 or submit our online contact form, and we will contact you soon.
