Guide to the Servicemembers Civil Relief Act (SCRA)

Here’s what you need to know about the SCRA to make the most of its benefits and put it to good use.

The SCRA: What is it?

Protection and benefits for active-duty service personnel are guaranteed by the Servicemembers Civil Relief Act (SCRA). Reduced, delayed, or waived duties to the general public are among the benefits of this relief act.

The SCRA was passed in 2003 to relieve the military of administrative and financial responsibilities so that they may concentrate on their core mission.

SCRA addresses many different concerns, including

• Interest on loans and credit cards
• Rental Contracts
• Safekeeping Funds
• Eviction
• Foreclosure
• Legal Proceedings That Are Not Criminal
• Leasing a Car
• Protection against death via prepayment
• The Taxes Paid on Income

Benefits of the SCRA

The SCRA program offers numerous safeguards and advantages. These are the most commonly asked questions and references to the SCRA benefit program:

Lower Interest Rates

Debt accrued before enlistment is subject to a 6% annual interest cap under the SCRA. Creditors who charge more than 6 percent interest must waive those fees for active-duty service members.

Those who qualify for this lower rate of interest can:

• Cash advances
• Mortgages
• Equity loans on a home
• Loans for College
• Money for Cars

Financing for off-road vehicles

Creditors can lower a Servicemember’s interest rate if they are provided with written notice and a copy of the Servicemember’s active-duty orders.

If a court rules that the debtor’s ability to pay the higher interest rate was not “materially damaged” by military duty, the creditor can avoid the reduction to 6%.

Military personnel is shielded from the effects of default judgments

If a Servicemember fails to appear in court, this provision prevents the entry of a default judgment against the defendant until after the court has appointed an attorney to represent the Servicemember’s interests.

If the person is absent for more than 90 days owing to military service, a delay or stay may be granted.

Apartment Lease Cancellation

When a person joins the military, the law allows them to give 30 days’ notice to their landlord and move out of their residence. A PCS order is similar to a reassignment order in that it requires a person to relocate permanently to a new location. Transferring to a new duty station is referred to as a Permanent Change of Station order.

If you receive orders to serve outside of the continental United States for 90 days or more, for example, you may terminate your apartment contract.

Lease Cancellation for a Car

If a service member is called to active duty for 180 days or more after signing a vehicle lease, the SCRA permits them to cancel their contract without penalty. Additionally, you may terminate your lease if you receive PCS or deployment orders that require you to be stationed outside the United States for 180 days or more.

Nonjudicial foreclosures are put on hold

A lender cannot foreclose on a home purchased before enlistment unless they have a court order. This safeguard is applicable in states where a nonjudicial foreclosure can take place without the need for a court ruling.

“Tail coverage” is part of the foreclosure postponement package. This means that you will be covered for up to a year after you separate from the military.

Other Benefits

• Spouses of active-duty service members have the choice of submitting their federal income tax returns either from their Home of Record or from their spouse’s current duty station.
• Any time a service member moves to an area without phone, cable, or internet service for more than 90 days, he or she is free to cancel service without penalty.
• If a service member’s spouse dies while serving in the military, the surviving spouse has the option to terminate the lease.
• A request for SCRA protection cannot be used as grounds for a lender to refuse credit or alter the conditions of an existing loan.

Eligibility for SCRA

You must be actively serving to qualify for SCRA benefits. Anyone in the National Guard or Reserves who has received orders to report for active service for 30 days or more is eligible.

Those in the Army, Air Force, Coast Guard, Marines, and Navy are subject to the law wherever they may be stationed (even combat zones).

The Servicemember’s immediate family and dependents are also entitled to many of the perks and safeguards.

SCRA Eligibility Period Beginning and Ending

Your SCRA eligibility period begins on the first day of your active duty service commitment and concludes 30 to 90 days after you separate from active duty. The SCRA protects for up to 180 days after a service member’s separation from active duty for purposes such as tax collection or the sale of the property.

Eligibility for members of the Reserve and National Guard begins on the date they receive mobilization orders. After receiving instructions, you are still protected by the SCRA even if you haven’t reported for duty and are in an unpaid position.

The Necessary Paperwork

The necessary paperwork to apply for or use your SCRA rights will vary based on what it is you’re trying to get. To request a lower interest rate, for instance, you may need to fill out a form at several institutions.

You will need to provide documentation of your active duty orders at the very least. Or a letter from your superior officer detailing the time you spent serving.

The DMDC (Defense Manpower Data Center) is a database maintained by the Department of Defense that can be queried to ascertain whether or not a person is currently serving in the military.

Having a significant impact

Being “materially affected” by military service is a common requirement for SCRA benefits. In each case, the specifics will be taken into account. If you need help exercising your rights under the SCRA, you should contact the legal support office at your military installation.

Implementing the SCRA

Many members of the military community are protected by the SCRA, however, this is not always the case. You may need to take some initiative to receive benefits and safeguards, such as filing an SCRA claim for relief.

If you need help figuring out what to submit for a petition seeking relief in a judicial procedure, an insurance claim, or a tax audit, you should seek legal counsel.

Debt financing via loans and charge cards

The SCRA may entitle you to a lower interest rate on credit cards and loans, but you often need to make a formal request and provide documentation showing that you are serving in the military.

Keep in mind that the discount will only apply to debts that existed before you enlisted in the military.

Breaking Leases

A member of the armed forces must provide written notice and a copy of their military orders to cancel a lease on a home or vehicle. The procedure for breaking a lease may differ from business to business. If you want to know how they do things, calling them is your best bet.

Myths surrounding the SCRA

In addition to the genuine advantages enjoyed by active-duty service personnel as a result of the SCRA, there are some misconceptions to avoid. To name just a few examples…

In all cases, the SCRA will be in effect

Getting help under the SCRA isn’t automatic. If your duty is “materially altered” by your military service, you may be eligible for certain protections under the SCRA.

If you’re considering filing a claim under the SCRA, it’s a good idea to consult with the legal counsel at your installation first.

All dependants are protected by the SCRA

All family members are treated the same as Servicemembers. To receive the SCRA’s protections and benefits, the active duty service member must meet certain criteria. As a result, it’s highly recommended that you consult with a lawyer who has experience with the SCRA.

Your rights under the SCRA cannot be waived

You can legally give up your rights as a military member, but you probably shouldn’t. Read the waiver carefully and get advice from a military lawyer before signing away your rights under the SCRA.

Criminal proceedings are covered by SCRA

No, the law does not apply to criminal proceedings but rather to civil ones like child custody and landlord-tenant disputes. In the case of a DUI, for instance, the SCRA will be ineffective.

The SCRA safeguards National Guard and Reserve members’ access to civilian employment opportunities.

On the contrary, the Employment and Reemployment Rights of Veterans Act (ERROV) and not the SCRA governs the rights and responsibilities of civilian employers about military personnel.

Conclusion

As a result of the SCRA, the rights and privileges of its beneficiaries are significantly expanded. Spending time learning them can help you save money as a service member by allowing you to apply them most effectively to your unique circumstances. Get legal advice to maximize your legal protections while serving in the military.