Many Americans will face financial challenges during their lifetimes. For military homeowners, the unique pressures of duty and deployment can result in additional stress, including concern about losing one’s home while stationed thousands of miles away.
The United States government developed laws specially designed to help federal military servicemembers and their families, particularly during and after times when they are on duty or deployed away from home. The Servicemembers Civil Relief Act (SCRA) provides many of these protections. Several states, like Alabama, have enhanced the protections afforded by the SCRA.
When military servicemembers volunteer to serve their country, they frequently face unique circumstances which can create financial distress—even beyond that experienced by most civilians. Many reservists and guard members earn substantially lower income when called to active duty, as compared to what they make in their civilian employment. Military personnel often serve in faraway locations. Servicemembers encounter difficulties in communication due to vastly different time zones and phone or computer access that is restricted or nonexistent. These challenges can make negotiating against a foreclosure, repossession of a vehicle, or eviction difficult, if not impossible.
The federal legislature has enacted laws that assist military servicemembers on active duty to help ensure that service does not worsen their financial standing. The SCRA anticipates the above scenarios and many more by protecting servicemembers while they are on active duty and, in some cases, for a period afterward.
The SCRA helps protect against the possibility of a servicemember losing a home while serving their country.
Loans originated prior to active duty. The SCRA provides the highest level of protection against foreclosure when the loan in question was taken out prior to a servicemember's call to active duty. For pre-service loans, the SCRA prohibits lenders from foreclosing on, seizing, or selling the home of military personnel on active duty, unless the servicemember waives this protection or a court orders that the foreclosure can proceed. This protection extends for a year following a servicemember's period of active duty to help military personnel readjust to civilian life and employment. (50 U.S.C. App. § 533). (To learn more, see Foreclosure Protections & the Military: When a Servicemember Gets a Mortgage Before Active Duty.)
Default judgments. The SCRA also protects servicemembers who take out a loan after beginning active duty, but in a more limited manner. Congress has helped ensure that legal counsel at least assists military servicemembers in civil lawsuits before any judgment is entered. Courts can’t enter a default judgment (a ruling made by a court when one party to a lawsuit has failed to answer the suit or appear in court) against a military servicemember on active duty. A court may enter a judgment if an attorney has been appointed to represent that servicemember. This representation gives a deployed servicemember an advocate for their case when they can’t be present to speak for themselves. But if an attorney appointed to represent a servicemember isn't able to locate the servicemember, the actions by the attorney in the case won't waive any defense of the servicemember or otherwise bind the servicemember. Furthermore, a court may halt proceedings for 90 days or more if it finds that the servicemember’s presence is critical for defending the case. (50 U.S.C. App. § 521). This protection can be essential when facing a judicial foreclosure, but typically does not protect against nonjudicial foreclosures. (To learn more, see Foreclosure Protections & the Military: When a Servicemember Gets a Mortgage After Active Duty.)
The SCRA also protects military servicemembers by placing:
(For more details about protections under the SCRA, see Legal Protections for America's Military: The Servicemembers Civil Relief Act)
The state legislature of Alabama has recognized the significant trauma and disruption that occurs following the loss of a military family member who was deployed overseas.
In Alabama, if a servicemember dies while deployed overseas, the lender must wait at least 180 days before starting a foreclosure against the surviving spouse or the servicemember’s estate, provided that the surviving spouse or the estate notifies the lender and asks for a delay. This protection only applies to mortgages taken out after August 1, 2009. (Ala. Code § 35-10-71). (To learn the basics about Alabama’s foreclosure laws and procedures, see our Summary of Alabama’s Foreclosure Laws.)
This protection is limited to the spouse and estate of military personnel on federal active duty who are killed while deployed overseas, but can provide a critical period to negotiate with the lender or take other steps to avoid foreclosure. (Ala. Code § 35-10-70).
The SCRA provides a great deal of protection for military servicemembers on federal duty. Also, Alabama law requires a significant postponement of foreclosure actions for the families of military personnel who are killed while deployed overseas. Servicemembers and their families who learn and use these laws might be able to avoid losing their home to foreclosure.
Military servicemembers facing financial problems should speak to military defense counsel (a military attorney independent from the standard chain of command specially designated to represent servicemembers confidentially), or an Alabama-licensed civilian attorney with experience in military law. The laws can be very complicated, and an attorney can help determine if the SCRA or Alabama law will apply to specific situations.
Because financial difficulties can sometimes impact a military servicemember’s security clearance, or result in disciplinary or adverse administrative action, servicemembers should avoid initially contacting their base legal office. Judge Advocates General (JAGs), the military attorneys who work in the base legal office, serve in the regular chain of command at their base. Military defense counsel or a civilian attorney can provide confidentiality that can be critically important to maintaining a servicemember's career.
Be sure to ask your attorney to look specifically at Alabama state laws regarding foreclosure of your Alabama home. Because military attorneys come from many different states, your military defense counsel might not be immediately aware of the additional protection that Alabama law provides.