Bills Logo

Information on GI Loan Default

Mark Cappel
UpdatedFeb 26, 2024

If you have a GI loan and are unable to pay for the home, can they hold money out of your social security?

If you have a GI loan and are unable to pay for the home and have to default on it can they hold money out of your social security disability check if the home doesn't sell for as much as the loan is?

No, they cannot take your disability benefits from you. Only the US Government can if you owe child support, taxes, student loans etc. When your loan goes into default, your servicer/holder is responsible for contacting you, the mortgagor, to determine the reason for the default and attempt to make arrangements to cure the delinquency. If the problem cannot be resolved by the time you are three payments past due, the servicer/holder is required to notify U.S. Department of Veterans Affairs that your loan is in default. After this notice is received, VA will attempt to contact you to discuss your current situation and help you determine the best course of action.

If your property cannot be sold for an amount which is greater than or equal to what you owe on the loan, VA may pay a "compromise claim" for the difference in order to help you go through with the sale. You must contact VA to discuss the situation and get prior approval for a sale with a compromise claim payment. The VA provides some information about the options to avoid a foreclosure.

For more information on foreclosures, please visit the foreclosure information page on

I hope the information provided helps you Find. Learn. Save.



Dealing with debt

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in Virginia, 25% have any kind of debt in collections and the median debt in collections is $1647. Medical debt is common and 14% have that in collections. The median medical debt in collections is $690.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.



BBob, Aug, 2011
Bill, my wife and I are getting a divorce. She is ending up with our house which is on a VA loan, how can I remove my name from this VA loan and if she defaults on the loan am I still responsible?
BBill, Aug, 2011
She will have to refinance and get a loan in her own name, in order to get your name off the loan. She will have to qualify for the loan, based on her income and credit.

Are you the veteran or is she? I will first answer as if it is you who is the veteran.

Your VA loan may be assumable. This means your wife may be able to take over or 'assume' the loan, continuing to make payments on the current loan. You take on some risks, if she assumes the loan. 1. If you don't obtain a Release of Liability from the VA, you may still end up being responsible for the loan, should she not pay as agreed. 2. Even if you get a Release of Liability, your home loan benefit may be lost.
I think you discuss these options with a divorce lawyer. If she gets the house and you are still on the loan, it leaves open the possibility of future problems.

If she is the veteran, she should look into assuming the loan.
BBob, Oct, 2011
BillHere is another scenario. I owe 120k on the house and sell it for 90k leaving 30k owed. How or will the VA work with me to payoff the remainder owed. I am the vet and home value has dropped below the owed amount so nobody will refinance, will I first need to get with the lender to see if they will allow for me to sell at the lower amount? I don't want to default but I may not have a choice. any insight on this matter will be greatly recieved
BBill, Oct, 2011
Through the VA, there may be assistance to veteran borrowers in default due to temporary financial difficulty. Start by contacting the VA.
SSBL, Apr, 2010
I recently came across your post and have been reading along. I thought I would leave my first comment. I don't know what to say except that it caught my interest and you've provided informative points. I will visit this blog often.
BBill, Oct, 2009
Thank you for your service to the country. Please see the Department of Veterans Affairs Web site to determine if you are entitled to any benefits.
jjames werner, Oct, 2009
was in the national guards for 6 yrs. Do I qualify for benafits.