AAFES Garnishment: What You Need to Know
If you’re an active service member or veteran of the U.S. military struggling to keep up with unmanageable debt payments, you should know you’re not alone. According to a recent study conducted by American Consumer Credit Counseling, more than 40 percent of military families have at least $5,000 in credit card debt. One primary form of debt for many military families is that stemming from the Air Force Exchange Service (AAFES), which can often result in the garnishment of a significant portion of your military pay.
If you are struggling with an AAFES garnishment, Erin B. Shank Attorney at Law can help. We can discuss your debt relief options and guide you through the bankruptcy process if that is the path you choose. Let us help you get out of debt safely and conveniently. Call or contact us online to get started with a free virtual consultation.
What Is AAFES Collections?
Many current and former service members incur significant amounts of Military Star Card debt or debt to the Army & Air Force Exchange Service (AAFES). These services provide convenient and affordable ways to shop. Unfortunately, they also make it all too easy for military members and families to accumulate crushing amounts of debt.
Unlike most creditors, the AAFES and the Military Star can garnish your military wages or retirement pay without first obtaining a judgment from a Judge. This means that they can withhold a significant portion of your army wages without first obtaining a judge’s permission. They can also garnish your income tax refunds. This process is often completed with the help of AAFES Collections.
AAFES Collections is a debt collection agency in the U.S. that works to recover past-due funds from those with Military Star Card or AAFES debt. Like other collection agencies, AAFES Collections may appear on your credit report as a collections account if you fall behind on your AAFES or Military Star Card payments.
If AAFES Collections is on your credit report, it could remain there for as long as seven years, whether or not you ultimately pay off your AAFES or Military Star Card debt. This could have a significant negative impact on your credit score. However, you may be able to find relief from your debt and the involuntary allotment(garnishment) of your wages with the help of an experienced bankruptcy attorney such as Erin B. Shank.
Can Bankruptcy Stop AAFES Garnishment?
So, how can you stop the AAFES from garnishing your wages and wreaking havoc on your credit score for years to come? If you file for Chapter 7 or Chapter 13 bankruptcy, you could eliminate your AAFES wage garnishment and the garnishment of your income tax refunds and set yourself up with a better financial position for the future.
When you file a petition for Chapter 7 or Chapter 13 bankruptcy, your creditors are required to cease all efforts to collect on your debts. This includes halting any involuntary wage garnishments for army veterans and refraining from making collections calls.
If you file for Chapter 7, your unsecured debts will likely be forgiven without you having to repay any of your creditors, including AAFES and Military Star. Unsecured debts are debts that are not “secured” by collateral, such as a house that could be repossessed if you fail to make regular mortgage payments. Military Star Card and AAFES debt are examples of unsecured debt, which will likely be discharged when you file for bankruptcy protection, meaning that you are no longer personally liable for that debt.
If you file for Chapter 13 bankruptcy, you can also discharge your AAFES or Military Star debt. However, if you file a Chapter 13 bankruptcy case, you will be required to propose a repayment plan to your creditors. This means you will replace your involuntary allotment with a voluntary monthly payment that will continue for three to five years. We attempt to place all of our clients in Chapter 7 bankruptcy cases, which does not include a repayment of unsecured debt, such as AAFES and Military Star.
It is important that you make at least the minimum payment to AAFES/Military Star until your bankruptcy case is filed. In order to prevent these creditors from starting to garnish you paychecks and income tax refunds. After your case is filed, Erin B. Shank will notify AAFES/Military Star in writing of your bankruptcy filing and on that day you can stop paying AAFES and Military Star and they will be prohibited under federal law from garnishing either your paycheck or your income tax refunds.
AAFES and Military Star are creditors whose debt can be discharged in both Chapter 7 and Chapter 13 bankruptcy cases. Many clients believe that debt to these creditors “survives” the bankruptcy discharge, but that is not true.
You can learn more about the bankruptcy process through our educational videos.
How Erin B. Shank Can Help You
If you are experiencing financial difficulties because of AAFES debt or garnished wages, reach out to bankruptcy attorney Erin B. Shank as soon as possible. Erin has nearly 40 years of experience helping thousands of Texans find relief from overwhelming debts and other challenging financial situations. Contact us today to get started with a free, virtual case review.