Servicemember Protection From Court Actions and Repossessions
(Page 2 of 2 of Legal Protections for America's Military: The Servicemembers' Civil Relief Act)
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May 18, 2016
Court Judgments and Repossessions
The SCRA also protects active duty service members from some court judgments and repossessions.
Delay of All Civil Court Actions
The SCRA allows active service persons to ask for a postponement (stay) of many kinds of civil actions in which the service person is a defendant. In addition, when calculating the statute of limitations (the time during which a person must bring a lawsuit, or lose the right to do so), the period of time that the person has been in the military is not counted. (See Nolo's article Statutes of Limitation: Is It Too Late to Sue? for an explanation of statutes of limitation.)
These provisions of the Act have been used most frequently in foreclosure and domestic relations cases.
No lender, including credit unions, banks, and individuals, may foreclose on, seize, or sell the homes of military personnel during active duty or up to one year thereafter unless the foreclosure is pursuant to a court order or a waiver by the service member. (Originally, the period of protection was during active duty and for 90 days afterwards; however, the protection was extended to nine months in 2008. Then, in 2012, the protection was extended to one year. The protection was set to revert back to 90 days at the end of 2014, but has been extended several times and will now expire on December 31, 2017. At that time, the protection will go back to 90 days, unless it is extended again.)
To be eligible for this protection, you must have taken out the mortgage before you began active duty.
A mortgage lender can request permission from the court to foreclose if it thinks that a borrower's active status has not materially affected his or her ability to pay the loan or appear in court. For example, a newly activated reservist whose income level has not dropped, who has been posted to a nearby city, and who can obtain leave to attend court will probably not qualify for a postponement of a foreclosure.
Special foreclosure protections for those whose loans are owned by Freddie Mac. Freddie Mac offers further foreclosure relief to servicemembers and their dependents over and above the SCRA. If Freddie Mac owns the mortgage, it will extend foreclosure relief to a servicemember and his or her dependent during the period of military service and for one year after the date military service ends when:
- The borrower is a servicemember, regardless of when the mortgage was originated, and the mortgaged property serves as his or her primary residence.
- The borrower is a dependent of a servicemember and the mortgaged property is the primary residence of the servicemember or a dependent of a servicemember.
- The borrower was a servicemember who died during his or her period of military service and the mortgaged property continues to serve as the primary residence of a dependent of the servicemember. Learn more at www.freddiemac.com/mortgage_help/military_assistance.html. Use the Loan Look-up tool on this website to find out if Freddie Mac owns your loan.
Active military personnel may ask for a postponement (stay) of divorce proceedings if they can show that their active status makes it impossible to attend the proceedings.
A default judgment occurs when you are sued and fail to appear in court, and the judge then rules against you in your absence.
Plaintiff must notify the judge that you are on active duty. Under the SCRA, a plaintiff (the person that brings a lawsuit) who seeks a default judgment against an absent active duty service member must notify the court that the service person is on active duty. If neither the service member nor his or her attorney appears in court, the court may appoint an attorney to represent the service member in his or her absence.
You may be able to reopen the case later. If the court enters a judgment against you during your military service, under certain circumstances you may be able to reopen the case later.
The SCRA prohibits repossessions performed without a court order (such as those done by merchants or "repo" specialists) of goods purchased by installment contract, such as consumer items or cars, as long as the purchase was made before active duty began.
If you are on active duty, the merchant must get a court order before it can repossess an item. Once in court, an active duty service member may apply for a stay of repossession proceedings. The judge will grant the stay if the service person's ability to pay the debt has been materially affected by entering active service, in the judge's view.
SCRA: Web Resources
The various branches of the United States military have helpful websites explaining the meaning and application of the Servicemembers' Civil Relief Act. For a detailed explanation of the Act, visit www.military.com and type "SCRA" into the search box. The resulting links give information on the Act as well as financial, educational, and other support services for family of active duty service members.
For a comprehensive discussion of legal issues facing tenants, get Every Tenant's Legal Guide by Janet Portman and Marcia Stewart (Nolo).
(To learn about other protections for those serving in the military, visit our topic page on Special Protections for the Military: Bankruptcy, Foreclosure & Debt Collection.)
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