Navy FCU not so BK Friendly After All...

[vet2019]

Just my experience, take it for what it is worth...

NAVY FCU is not as bankruptcy friendly as many believe; if it's your only option for a CC post discharge then it my be good for you but....

I financed an auto with them a couple months prior to filing (Ch 7, Nov '18). My lawyer said they were ANGRY and were going to sue me even though he made clear I was reaffirming the auto, so nothing really to sue for...

They gave me a secure credit card after discharge. So I tried their banking but things take forever to post with them and my federal deposits didn't show early like they did with another credit union so I went back to the other credit union (SkyOne FCU). Navy's mobile deposit process is also antiquated.

NAVY FCU will NOT remove the bankruptcy flag on your online account post discharge even if you did not burn them. This is annoying because it's a bright red text warning every time you log in to your online account. They are the only bank that did not remove the flag post discharge; I called and talked to multiple people. I can still login to USAA and nothing. My mortgage (Suntrust) shows nothing and re-allowed online payments. The credit union I used for checking prior and post discharge shows no flags and gave me an unsecured $500 credit card (SkyOne FCU).

I recently totaled the auto I financed with Navy. First time I ever had a serious accident. They denied my application for new auto. I appealed it and they approved it with an 18% APR. Capitol One approved with around 5.4 - 9.0% depending on new, used, etc. I filed CH7 with no late payments and I believe that help keep my score higher that what I have seen others say. My scores post discharge (Mar 2019) were low-mid 600 and now mid-high 600's.

I recently closed the Navy credit card and once I pay off the negative equity (forgot to get GAP the one time in my life I need it), my hands will be wiped cleaned with NAVY FCU, never to return.

Credit Cards I have got post discharge:

Capitol One (Secured $500 CL w/ ~$250 deposit; had option to deposit more for higher CL; they increased CL to $800 at ~5 months)
Navy FCU (Secured $500 CL w/ $500 deposit) - recently closed as noted above
Credit One (Unsecured $300, increased to $450 1-2 months after opening)
Indigo (Unsecured, $300)
SkyOne (Unsecured, $500)
Wal-Mart Rewards Store Card (Unsecured, $500, by CapOne) - most recent one

I have been denied by Chase, multiple Barclays cards, and multiple store cards underwritten by Synchrony. The number of inquiries might have hurt me on some, but I figured I would just give as many as I could a try the first year while my score was already shot some and then build on from there.

I burned BOA, USAA, AMEX, and a CU I barely used anymore.

[justbroke]

We don't say that Navy Federal is BK friendly if you left them holding the bag. This is the case for just about every other Federal Credit Union. Most credit unions (CUs) do not like losing money since they are "member" organizations. They typically throw you out, but NFCU is partially nice on that front. NFCU won't through you out, but they will not let you ever have any more credit products.

Now, what we do say is that NFCU is friendly to the recently bankruptcy, so long as you didn't leave NFCU with debt. In that particular case, they are very easy to work with as they are a discretionary lender and look more to the relationship rather than the credit scores.

(For what it's worth, USAA is not a credit union. They are a special type of association, but behave more like a National Chartered Bank.)

[vet2019]

We don't say that Navy Federal is BK friendly if you left them holding the bag. This is the case for just about every other Federal Credit Union. Most credit unions (CUs) do not like losing money since they are "member" organizations. They typically throw you out, but NFCU is partially nice on that front. NFCU won't through you out, but they will not let you ever have any more credit products.

Now, what we do say is that NFCU is friendly to the recently bankruptcy, so long as you didn't leave NFCU with debt. In that particular case, they are very easy to work with as they are a discretionary lender and look more to the relationship rather than the credit scores.

(For what it's worth, USAA is not a credit union. They are a special type of association, but behave more like a National Chartered Bank.)

Think you missed my point... I didn’t burn Navy as I reaffirmed my auto loan; thought I pointed that out. The only thing they are “friendly” with is a dollar for dollar secure credit card, but several banks or credit unions will do this. So, it is nothing really special unless Navy is just the only option for you. The credit union I have my deposits going to gave me an unsecured card....that’s more friendly. And 18% APR on a new car loan is NOT friendly.

[justbroke]

I read. what you wrote, but that flag is simply to prevent automatic approvals. I know of someone who had a BK and reaffirmed, as an NFCU member and they never received the flag. I received the flag, but it just means that I have to call in and ask to have it looked at specifically by the lending team (because it will auto-deny). Just as you called in to appeal, the lending team overrode the flag. They can do that and do that every day.

The point of that statement that NFCU is BK-friendly is that they are friend to the recently bankrupt, who did not have any relationship with NFCU at the time of the bankruptcy.

Of course, others may be "more" friendly but it's usually the score that's the driving factor. Example, one could get a post-bankruptcy car loan for 7% at one lender, and the other lender will have an APR of 18%. The lending rate is usually directly related to which bureau the lender pullsl and exactly which scoring model they use. Here are the most used models: FICO 8, FICO 9, FICO Auto 9, FICO Auto 8, FICO 2, FICO 4, FICO 5, Beacon 5, Vantage 3. The scores between them can vary wildly (varying by as much as 100 points)

As a general datapoint, the final APR depends on the specific lender, the bureau they pull, and the scoring model. Credit unions often use regular FICO scores (FICO 8, FICO 9), where true auto lenders use Auto-enhanced scores FICO Auto 8/FICO Auto 9. Sometimes, and mine was this way, the Auto-enhanced score could be in the low 700s and the FICO 8 score in the low 600s. I know that Capital One and Roadloans/Santander use the Auto-enhanced model (with Santandar/Roadloans using FICO Auto 8 from Experian). NFCU uses your Transunion FICO 8.

I hope that helps to understand why the APR rates could vary wildly between lenders, and that NFCU offering you 18% doesn't mean they are not bankruptcy friendly, but just looking at your (non Auto-enhanced) score.

Maybe that will help someone in the future, or not.