Many individuals have faced the stressful, emotional challenges of financial troubles. For military servicemembers, the added complexity of military duty and deployment can make facing a foreclosure feel truly hopeless.
Fortunately, the federal government has enacted laws, like the federal Servicemembers Civil Relief Act, to help protect military servicemembers due to their unique circumstances. Some states, including New York, go even a step further. In New York, state laws might help you avoid one of the most serious consequences of financial troubles—losing your home to a foreclosure.
Military servicemembers encounter unique scenarios that can further complicate difficult financial situations. Reservists and guard members who are called to active duty sometimes see their income reduced significantly from what they were earning in their civilian jobs. Deployed military servicemembers will likely find it difficult to defend against a foreclosure, eviction, or repossession of a vehicle while perhaps serving their country thousands of miles away, often with limited means of communication.
Congress has recognized the importance of making sure that a military servicemember’s financial standing isn’t worsened by a commitment to service. The federal Servicemembers Civil Relief Act (SCRA) provides protections against the above scenarios and many more during service and, in some cases, for up to a year afterward.
The SCRA provides legal relief to military personnel who are in danger of foreclosure.
Protections if you took out the loan before going on active duty. A lender may not foreclose on, seize, or sell the home of a military servicemember while on active duty or up to one year thereafter unless the foreclosure is pursuant to a court order or the servicemember signs a waiver. (This one-year period might be temporary—it’s scheduled to be reduced to 90 days as of January 1, 2020.) To be eligible for this protection, you must have taken out the mortgage before you began military service. (50 U.S.C. App. § 533). (To learn more, see Foreclosure Protections & the Military: When a Servicemember Gets a Mortgage Before Active Duty.)
Protections if you took out the loan after going on active duty. If you took out your mortgage after going on active duty, a court generally can’t enter a default judgment against you in a foreclosure action while you’re on active duty. (50 U.S.C. App. § 521). (A default judgment happens if you don’t respond a lawsuit.) This protection can come into play if you’re facing a judicial foreclosure. (To learn more, see Foreclosure Protections & the Military: When a Servicemember Gets a Mortgage After Active Duty.)
The SCRA also includes these key provisions during the protected period:
(For more details about the protections that the SCRA provides and applicable protection periods, see Legal Protections for America's Military: The Servicemembers Civil Relief Act)
New York has enacted legislation, called the New York State Soldiers' and Sailors' Civil Relief Act, which effectively mirrors the protection provided by the SCRA for military servicemembers in federal active duty status. More importantly, though, the Act extends protection to personnel in active duty in service of the State of New York.
Military servicemembers actively serving in the New York Naval Militia and those serving in the New York Guard, New York Army National Guard, and New York Air National Guard under Title 32 status (beyond the very specific and limited Title 32 service scenarios under which the SCRA provides federal protection) are entitled to protections under New York Law. (N.Y. Mil. Law § 301).
Much like the SCRA, New York law can help servicemembers avoid foreclosure if they owned the property before military service (and still own it) and the mortgage originated prior to the commencement of military service. A court may delay foreclosure proceedings, including a sale, so long as the court believes that the servicemember’s military duty has impacted the ability to defend against a foreclosure. New York provides for criminal penalties, including imprisonment, against individuals who conduct a foreclosure sale while the law protects a servicemember. (N.Y. Mil. Law § 312).
Lenders and servicers might also be prohibited from imposing fees and penalties during a servicemember’s active duty for the state unless the court determines that military service has not materially affected the servicemember’s ability to meet financial obligations. (N.Y. Mil. Law § 305).
As with the SCRA, New York law provides protections in other situations, like eviction and vehicle repossession. (For specific details about foreclosure and other protections that New York law provides, review the New York State Soldiers' and Sailors' Civil Relief Act.)
If you’re a military servicemember, the SCRA and New York law could help you fight a foreclosure. Talk to a JAG, military defense counsel (a military attorney independent from the normal chain of command specifically designated to represent servicemembers confidentially), or civilian attorney with experience in military law to help determine which foreclosure protections, and other protections, apply to your circumstances.
Military servicemembers with financial troubles that might impact their security clearance or result in administrative or disciplinary action should request a meeting with military defense counsel or an experienced civilian attorney to discuss the SCRA and their situation confidentially.
If you’re facing a foreclosure of your New York home, be sure to ask your attorney to look specifically at New York state laws. Military attorneys come from all over the country and might not be immediately aware of the additional protections that certain states provide.