My question involves collection proceedings in the State of: Tennessee
I was active duty military at the time I signed up for the Military Star card. Upon exiting the military with a medical pension for the rest of my life, I became retarded for several months (while taking a huge mix of anti-depressants & other meds) & maxed out the card at around $5000. Being the irresponsible person I was, I never paid anything on this card (along with about 5 other cards that were maxed) & tried the "ignore it & it will go away" mentality. This actually worked for the banks. Three years later, almost all of the cards have fallen off of my credit report & it has steadily started to rise out of the 400's & I'm in the low 500's now. I signed up for a secured credit card & deposited $500 into a savings account as collateral so I can attempt to rebuild my credit. Anyhow, this Star card is basically a federal debt which has ballooned to $8000 thanks to finance fees & them constantly charging 18% each month (which I was unaware of until today).
They had a garnishment of my pension ($134) for about 9 months before the card was actually closed. After speaking with AAFES collections today, I was told that was just for the past due amounts on the card because the garnishment actually stopped. I also had my tax return for 2013 taken by them in April for $460. I recently checked my credit report & saw that this Star account was at $7000. So I was surprised to see they were wanting a touch over $8000 now. Upon speaking with AAFES, they refuse to work out a payment plan nor will give me an early payoff offer. I also requested that a statement be sent which they refused, claiming they had no idea what I purchased, but when I asked for proof of these finance charges that seem to be reoccurring, I was told the part about them adding 18% every month. They still refuse to send any documentation.
The lady also told me that I was welcome to email/fax an early payoff offer to them & it would take 4-6 weeks before I heard a decision but they would not be making any counter offers, they would just accept or deny the proposal. If I wanted to make more offers after they rejected them, I could continue sending them offers.
It appears that my options are to attempt to get them to settle for less, to pay off the entire amount or to allow my pension to be garnished for the next ~10 years for $134 as it will probably never be paid off while they're adding 18% every month. As I said, I had a few stages of psychosis I went through for several months while racking up all of this debt. I made some really bad choices & I'm trying to climb out of the hole I dug myself. The good part is that nearly all of the credit cards have dropped off of my credit report & the couple of stragglers will be gone within the year, I would imagine. I'm trying to repair my credit & this will be the only obstacle in my way.
What's my best course of action here?

