Military Families Face Financial Challenges When Loved Ones Are Called Away

Business Wire, April 15, 2003

Business Editors

SEATTLE--(BUSINESS WIRE)--April 15, 2003

When military service men and women are called for duty, their families face some huge challenges at home, and one of the biggest can be personal debt.

Three reasons lead the list:

-- Activated reservists typically see their incomes drop - often

by 50 percent or more - but family expenses such as mortgage

and car payments stay about the same.

-- For families with teens and young children, the temptation is

strong to console children with treats purchased outside the

family budget.

-- The husband or wife left at home doesn't have a partner to

help talk through spending and saving choices.

U.S. Army veteran Jim Frye is a credit counselor at American Financial Solutions (AFS), a nonprofit CareOne credit counseling/a agency. He understands the unknowns that accompany military life. Those enlisted can be called to serve at any time. "You may hear a rumor that you are going to be called, but you never know for sure until you receive your orders," he said. "For military families who are calling AFS for debt help - they usually haven't planned ahead and the one left behind often faces huge debt alone."

"By the time a military family member calls us, they are so upset and shocked that they can't see how they're going to meet the family's financial obligations alone," said Cuba Craig, chief executive officer of AFS.

Credit counselors at AFS work near the U.S. Navy's facilities at the Puget Sound. Many of them are related to military personnel or are retired from military service. They understand how easy it can be to overextend when deployment happens.

Credit counselors and others providing CareOne services, including those based at Consumer Education Services Inc. (CESI) in North Carolina, have a special understanding of military issues: deployment; credit card debt that can be a barrier to promotion; the young enlisted man or woman who buys on credit but doesn't know the basics.

"We are especially sensitive to calls we receive from military spouses and loved ones who are dealing with this issue," said Diane Chen, chief executive officer of CESI in Fayetteville, N.C. "Being in North Carolina, we are located in the heart of military country, there are four large bases in our area. So many of the people who come to us for help have a connection to the military."

Counselors at CESI and AFS are pointing military callers to their creditors for help that only deployed military qualify for: relief under the Soldiers' and Sailors' Civil Relief Act of 1940. Service members called to active duty may be eligible for a reduction in interest rates on mortgage payments, credit card debt and other protections. Interest rates on credit card debt can be trimmed to 6 percent should the service member qualify.

"More than 30 members of our team of counselors have served in the military or have family members who have served in the military," said Craig. "We believe making them aware of the Soldiers' and Sailors' Civil Relief Act is an important part of the counseling process we can provide while our country is at war."

AFS counselors advise military deployed callers to contact their creditors to discuss the benefits of the Soldiers' and Sailors' Civil Relief Act. "While our experienced counselors offer thoughtful insights and a sympathetic ear to deployed families, the consumer must contact their creditors on their own for information on the Act; they must be their own advocates," said Craig.

/a: CareOne Credit Counseling is an initiative by nonprofit credit counseling agencies to provide the highest standards of service to consumers. Agencies that operate under those standards commit to inform and educate consumers about personal finance and to treat those consumers with honest, understanding, respect, humility, humanity and caring.