Posted on Nov 19, 2020
Will StarCard debt interfere with re-enlistment?
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I have StarCard debt. Currently on a payment plan which both parties have agreed to and I pay faithfully every month. When I called and talked to them today and mentioned I was trying to get back in the Army the guy said that I may have to pay off the entire StarCard balance before I can re-enlist since it's considered federal debt. Has anybody run into this or seen this cause problems? It's only a few thousand dollars but I haven't got that big of a lump sum.
Posted in these groups: 
Prior Service
Re-enlistment
Prior Service Re-enlistment
Posted 4 y ago
Responses: 10
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Don't believe Bill collectors, their job is to get you to pay, or else get you to pay a little in order to obligate you and extend the statute of limitations for you. StarCard is not federal debt. Even your Government Travel Card is not federal debt. Your debt has been sold to a collection agency for a fraction of the amount you owe, usually pennies on the dollar. The collection agency, a civilian agency, now owns your debt. If you owed a federal debt the department of Treasury would garnish your tax returns and wages till it was paid.
Collection agencies will lie through their teeth to get you to pay because most of the debts they purchase never get settled, they in turn sell them cheaper to another agency who will try to collect the debt. As long as you're paying your bills on time you should have no issues.
Collection agencies will lie through their teeth to get you to pay because most of the debts they purchase never get settled, they in turn sell them cheaper to another agency who will try to collect the debt. As long as you're paying your bills on time you should have no issues.
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SPC Cathy Goessman
Actually AAFES can and does do both of those things. I made a payment arrangement to avoid garnishment and would have had my return taken by them if I got one. I worked some as a contractor so owed $40 this last year.
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SFC (Join to see)
SPC Cathy Goessman turns out AAFES is a federal debt lol. But I this case, his debt was sold to debt collectors by AAFES for whatever reason, and is no longer a federal debt because it was bought by a private company
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SPC Cathy Goessman
His debt? AAFES actually still reports this on my credit report as a collection account versus a charge off so I'm trying to iron out if this debt was actually sold off or is just managed by the collection company.
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This is one of the reasons why I always answer with a NO when asked if I want a Star Card. And also why I usually tell people to never get one.
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SGM Brian Carter
There is no reason to avoid having a star card. I am sure this person's experience is not a reason you have never done anything.
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SPC Cathy Goessman
Late payments on most credit cards don't result in them garnishing a soldier's entire paycheck. AAFES has done that multiple times. They are known for being vicious about getting their money and not caring if soldiers are able to eat or put gas in their car for the month.
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CPT Lawrence Cable
SPC Cathy Goessman - You can't have 100% of your pay garnished. The limit is 25% of your disposable income. However, I will point out that a Star Card is dischargeable in Bankruptcy. If it is really an issue, large amount with payments extending until you are dead, and effects you ability to make a living, I would seriously consider it. Do not believe your collections people, talk to a lawyer.
The problem with most people in bankruptcy is they wait until they are past due on everything and have multiple collectors at the door.
The problem with most people in bankruptcy is they wait until they are past due on everything and have multiple collectors at the door.
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SPC Cathy Goessman
I considered bankruptcy at one point but I don't really have enough dischargeable debt to justify the impact to my credit history.
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It shouldn’t be an issue since the debt is not, based on your statement, is not on default nor on collection.
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SPC Cathy Goessman
That was my belief. It was in default at one point and sent to a collection agency. I pay them. The guy said that technically the entire lump sum balance is immediately due and could back to bite me quick if I didn't pay it off ASAP and have a federal check coming in as they could garnish it. I have no problem with paying them so I'll just make it a priority once I have the financial means.
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