What’s the best move with this 25k debt… need advice

Trying to help my friend figure out her debt situation. She owes $25k total—$20k on credit cards and $5k on a car loan. She re-enlisted in the military and is getting a $27k bonus soon, though after taxes it’ll probably be around $20k. Her credit cards are maxed out, and some accounts are past due, with one already closed. We made a budget and have a plan, but she’s not sure whether she should try settling the debts or just pay everything off fully. She’s worried about making her already bad credit even worse.

If she doesn’t need a loan or new credit soon, it might not matter if her credit gets worse. Just aim to pay everything off in the next 8-12 months.

Settling the debt instead of paying in full will hurt her credit more. She should just pay it all off and be thankful for the bonus.

This is more than just a credit issue—it could affect her military career. Debt settlement isn’t a good option here. If her credit remains delinquent, it might cause issues with her staying in the military. Worse, they could even ask her to repay the bonus.

She should put everything toward clearing her past-due accounts. Keeping a military career safe is more important than trying to save money on debt.

@Lior
Exactly. She needs to use the bonus and pay every cent.

@Lior
Yeah, but will they actually take action? Probably not, especially with low recruitment rates and the bonus involved.