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Home >> Military Issues
Basic Financial Rights Under the
Servicemembers Civil Relief Act
There are basic rights granted to servicemembers under the Servicemembers Civil Relief Act (SCRA). These rights exist to ensure that the men and women serving in the military are not penalized because of their service, because the military sends them literally anywhere on Earth at a moments notice, or that they must endure many hardships because of their service. In this review, we'll examine a few of the more commonly needed rights that relate to the servicemembers financial well-being.
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6% Interest Rate
If a servicemember has a loan that has an annual rate greater than 6%, that rate should be reduced to a maximum of 6%. The intent here is that a person going from a high-paying civilian job to a lower-paying military income should have some relief. The intention is not that you can't be charged a higher rate after you are in the military. At that point, the servicemember understands his/her income and expenses, and what he can afford. New loans may be at a higher rate, so this protection is given when there is an existing loan, pre-service debt, and then the person joins the service or is called to active duty. Simply send a request to your creditors with a copy of your orders and they should reduce higher rate obligations you have. This applies even if there are other borrowers on the loan. They can benefit from this because of your service.
Lease Terminations
Leases for a residence, professional, business, agricultural or similar purpose that are occupied by the servicemember or their dependents, or were intended to be occupied by either of them may be canceled early and without penalty. Motor vehicle leases have similar protections. When a servicemember is told he/she has to move to the next city or to another country, it isn't his choice and the law says they should not be penalized for this.
As to a lease for a residence or business as examples, the servicemember can terminate the lease if it was executed before joining the military or being called to active duty (much like pre-service debt mentioned above), or if it was a post service lease and you receive permanent change of station (PCS) or deployment orders that will extend for ninety days or more. The lease will terminate 30 days after the next rent payment is due.
Motor vehicle leases are a little different. They may be terminated if it is a pre-service lease and the servicemember is later called to duty or receives orders for a period of not less than 180 days. This also applies if it is a lease executed during military service and you later receive PCS orders outside the continental United States or deployment orders for a period of not less than 180 days. While penalty fees are not allowed, you will have to return the car within 15 days after giving notice and some fees and taxes plus reasonable charges for excessive wear and tear and mileage may be owed.
Eviction from a Rental Home
The servicemember and his/her dependents may not be evicted from his home because of nonpayment of rent, without a court order. This applies when the rent payment is $2,465 or less each month. This amount is from 2004 and is adjusted annually based on the Consumer Price Index.
Stays in Legal Proceedings
When military duty materially affects a servicemembers ability to appear at a judicial or administrative hearing you will be granted an automatic 90 day extension or delay in those proceedings when you request it. Your request must include your explanation of how your current military duties materially affect your ability to appear, state when you can appear, and include a letter from your commanding officer confirming that your military duties prevent your appearance and that leave can not be authorized for you at that time.
Default Judgments
Before a judgment is ordered by a court, the plaintiff who is pursuing the action must file a sworn statement indicating whether or not you are in the military service. As a servicemember, an attorney would be appointed to represent your interests. If a default judgment is entered during your military service or within 60 days after you leave the military, you may attempt to reopen the judgment. You will have to prove that you were not able to defend yourself because of your service. Other requirements exist, so this is not a "get out of jail card free" scenario, but you do have certain rights and remedies available.
In a similar order, actions to enforce a storage lien or pre-service mortgage must be delayed or at least adjusted during your period of service plus 90 days after it ends.
Conclusion
The rights awarded to a servicemember under the SCRA extend beyond those briefly described above. These are highlighted because of their financial nature. You have additional protections that apply to taxes on income and property, insurance, Powers of Attorney, voting rights and more. Your Judge Advocate General will have information and be able to assist you in your times of legal need. Your SCRA rights do not mean that you do not have to pay debts you owe, but you are afforded certain protections that may reduce your loan payments and ensure that you and your family have a home while you are serving your country. Never ignore your creditors or landlords, but do understand that your absence does not automatically mean that your affairs can be abused.
Published on BankingQuestions.com 09/19/08
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