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The Soldiers and Sailors Civil Relief Act of 1940
offers many financial benefits to military personnel.
The SSCRA has been amended 11 times since its
inception. An amendment was made in 2003 under
President Bush. At that time its name was changed
to the Servicemembers Civil Relief Act (SCRA).
The Act helps uniform services personnel who are
called to active duty. It protects servicemembers by
suspending certain financial and judicial
proceedings that may adversely affect the individual
members. The suspension may last for the duration
of the term served. If a mortgage is involved there
is a further nine months allowed after the
servicemember has terminated military service.
The servicemen covered includes, Army, Navy, Air
Force, Marine Corps, Coast Guard and the
commissioned corps of the National Oceanic and
Atmospheric Administration and the Public health
Service.
Our federal government realized that it had to do
something to alleviate the worries of military
personnel while they were away from their homes. In
many cases servicemembers faced a reduction in
pay while away on duty. Many leave behind
mortgage payments, car payments, credit card
payments and apartment leases. Important
provisions in the Act address some of these issues.
They include:
Interest on debt.
Under the Act, the interest on debts incurred prior to
active duty, is limited to 6% while the servicemember
is away on military service. The creditor has the
right to appeal to the courts to get the rate
overturned. The burden of proof is on the creditor to
show that the servicemember can pay the amount
requested. The interest is not accrued, therefore
the creditor can not pursue the servicemember after
he or she leaves the military. In addition, the creditor
can not make a derogatory remark on the
servicemember's credit report. If there is an adverse
remark on the credit report, the servicemember can
seek damages under the Fair Credit Reporting Act
(FCRA).
Rental housing.
In the case of rental housing, the law allows the
servicemember to terminate the lease with 30 days
notice in writing. His or her deployment has to be for
a minimum of 90 days.
Car lease.
Servicemembers on active duty have no need for a
personal car. Therefore, the law offers some
protection from unnecessary monthly payments. A
car lease can be terminated by the servicemember if
the deployment is for 180 days or more.
Civil court action.
If servicemembers face civil court action such as
divorce, bankruptcy or foreclosure, they can
petition the court to have the case delayed. The Act
covers a co-maker of a note as well. Therefore the
spouse is protected. A lender has to prove that
military service was not a factor in the
servicemember's inability to pay the mortgage.
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offers many financial benefits to military personnel.
The SSCRA has been amended 11 times since its
inception. An amendment was made in 2003 under
President Bush. At that time its name was changed
to the Servicemembers Civil Relief Act (SCRA).
The Act helps uniform services personnel who are
called to active duty. It protects servicemembers by
suspending certain financial and judicial
proceedings that may adversely affect the individual
members. The suspension may last for the duration
of the term served. If a mortgage is involved there
is a further nine months allowed after the
servicemember has terminated military service.
The servicemen covered includes, Army, Navy, Air
Force, Marine Corps, Coast Guard and the
commissioned corps of the National Oceanic and
Atmospheric Administration and the Public health
Service.
Our federal government realized that it had to do
something to alleviate the worries of military
personnel while they were away from their homes. In
many cases servicemembers faced a reduction in
pay while away on duty. Many leave behind
mortgage payments, car payments, credit card
payments and apartment leases. Important
provisions in the Act address some of these issues.
They include:
- Reduced interest rate on mortgages.
- Reduced interest on credit cards.
- Protection from eviction if the rent is less than
$2,400 per month. There is an adjustment for
inflation. In 2008 the cap was $2,831.13. The
court is allowed to stay the eviction for up to 3
months. - Delay of civil court action such as bankruptcy,
foreclosure and divorce proceedings.
Interest on debt.
Under the Act, the interest on debts incurred prior to
active duty, is limited to 6% while the servicemember
is away on military service. The creditor has the
right to appeal to the courts to get the rate
overturned. The burden of proof is on the creditor to
show that the servicemember can pay the amount
requested. The interest is not accrued, therefore
the creditor can not pursue the servicemember after
he or she leaves the military. In addition, the creditor
can not make a derogatory remark on the
servicemember's credit report. If there is an adverse
remark on the credit report, the servicemember can
seek damages under the Fair Credit Reporting Act
(FCRA).
Rental housing.
In the case of rental housing, the law allows the
servicemember to terminate the lease with 30 days
notice in writing. His or her deployment has to be for
a minimum of 90 days.
Car lease.
Servicemembers on active duty have no need for a
personal car. Therefore, the law offers some
protection from unnecessary monthly payments. A
car lease can be terminated by the servicemember if
the deployment is for 180 days or more.
Civil court action.
If servicemembers face civil court action such as
divorce, bankruptcy or foreclosure, they can
petition the court to have the case delayed. The Act
covers a co-maker of a note as well. Therefore the
spouse is protected. A lender has to prove that
military service was not a factor in the
servicemember's inability to pay the mortgage.
prev: next: Home:
Mortgage And
Foreclosure Protection
For Our Men and
Women In Uniform
Foreclosure Protection
For Our Men and
Women In Uniform
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