Legal Protections for America's Military: The Servicemembers Civil Relief Act

Active service members can take steps to reduce loan obligations,prevent court judgments, and avoid eviction and foreclosure.

A powerful federal law—the Servicemembers Civil Relief Act—helps service persons handle their legal affairs and reduce financial obligations while on active duty. The law aims to allow military members to serve without suffering financial or legal repercussions at home. In particular, Congress recognized that military pay for many activated reservists would likely be lower than their normal income, making it hard to pay debts.

Below we discuss the following benefits provided by this law:

  • reduced interest rates on existing debts
  • special treatment for tenants regarding lease cancellations and evictions, and
  • protection from court actions, including foreclosures and repossessions.

Servicemembers Civil Relief Act: Applicability

The Servicemembers Civil Relief Act (SCRA) (50 U.S.C. § 3901 and following) applies to all full-time active duty members of the five military branches (Army, Navy, Air Force, Marine Corps and Coast Guard), reservists on federal active duty, members of the National Guard on federal orders for a period of more than 30 days, and commissioned officers of the Public Health Service or the National Oceanic and Atmospheric Administration (NOAA).

Reduced Interest Rates on Existing Debts

Under the SCRA, many active duty personnel are entitled to a 6% interest rate cap on debts or financial obligations of any kind (except federal student loans that originated prior to August 14, 2008) during the period of military service. For mortgage loans, the coverage is the same period, plus one year. Interest over 6% per year is forgiven.

To be eligible for the reduced rate, you must have taken out the loan before you began active duty. For example, a reservist who buys a car in June and goes on active duty the following October is likely entitled to the reduction. A sailor who secures a car loan while on active duty and then is transferred out of the country does not qualify for the reduction.

Special Treatment for Tenants

Many active duty servicemembers may also be able to terminate lease obligations and avoid eviction.

Cancellation of Residential or Commercial Leases

Tenants who enter active military service after signing a lease or rental agreement have a right to get out of their rental obligations. This is true for both residential and commercial (business) leases. You must hand deliver, send via private carrier, or mail written notice of your intent to terminate your tenancy, along with a copy of your orders, to the landlord or manager.

  • Month-to-month rental agreements. Once the notice is mailed or delivered to the landlord or manager, the tenancy will terminate 30 days after the day that rent is next due. This rule takes precedence over any longer notice periods that might be specified in your rental agreement or by state law. If state law or your agreement provides for shorter notice periods, the shorter notice periods will control.
  • Leases. Once the notice is mailed or delivered, the tenancy will terminate the last day of the month following the month in which the notice is delivered.

Delaying Eviction for Nonpayment of Rent

The SCRA requires courts to postpone (stay), for up to three months (90 days) or longer, some residential evictions for nonpayment of rent.

Which tenants are affected? The SCRA applies if your spouse, children, or other dependents occupy the rental unit during a period of military service. (A dependent is someone you've supported in the past 180 days, by paying more than half of that person's living expenses.)

Rental amount. The Act's protections apply when the rent is $3,716.73 (2018) per month or less. The figure is adjusted each year to account for inflation or cost of living increases.

The effect on an eviction lawsuit. The SCRA does not prevent a landlord from serving a termination notice for the nonpayment of rent. But a landlord who has filed suit must tell the court that the tenant is an active service person—so be sure to notify your landlord when you are activated. The judge will decide whether the service person's status in the military materially affects his or her ability to pay the rent. If the judge determines that it does, the judge may stay the eviction. If the judge decides otherwise, the lawsuit will continue and may result in an eviction.

Court Judgments and Repossessions

The SCRA also protects active duty servicemembers from some court judgments and repossessions.

Delay of 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.

These provisions of the Act have been used most frequently in foreclosure and domestic relations cases.

Foreclosure

A lender may not 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 servicemember.

Eligibility for this protection. To be eligible for this protection against foreclosure, you must have taken out the mortgage before you began active duty. (Learn more about foreclosure protections for members of the military who took out a mortgage before going on active duty or after going on active duty.)

The lender can ask a court for permission to foreclose. A 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.

Default Judgments

A default judgment occurs when you are sued and fail to respond to the suit, and the judge then rules against you.

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 servicemember must notify the court that the service person is on active duty. If neither the servicemember nor his or her attorney appears in court, the court may not enter a judgment until after the court appoints an attorney to represent the defendant. If an attorney appointed to represent a servicemember can't locate the servicemember, the actions by the attorney in the case don't waive any defense of the servicemember or otherwise bind the servicemember.

You might be able to reopen the case later. If a court enters a default judgment against a servicemember during the servicemember’s period of military service (or within 60 days after termination of or release from such military service), the court entering the judgment must, upon application by or on behalf of the servicemember, reopen the judgment for the purpose of allowing the servicemember to defend the action if it appears that the servicemember:

  • was materially affected by reason of that military service in making a defense to the action, and
  • has a meritorious or legal defense to the action or some part of it.

Repossessions

The SCRA prohibits repossessions performed without a court order—such as those done by merchants or "repo" specialists—of goods purchased by installment contract, like 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.

Getting Help

This article discusses a few of the protections that the SCRA gives to servicemembers. To learn more, contact your local JAG office. You also might be able to get help from your state attorney general's office.

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