Learn everything you need about the SCRA in order to get the best out of it and make good use of it.
What is the SCRA?
The Servicemembers Civil Relief Act, (SCRA), provides protection and benefits to active-duty military personnel. This relief law offers many benefits, including reduced, delayed, or waived obligations to the general public.
In 2003, the SCRA was passed to free the military from financial and administrative responsibilities. This allows them to focus on their core mission.
SCRA addresses many different concerns, including
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Interest rates on loans and credit cards
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Rental Contracts
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Safekeeping Funds
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Eviction
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Foreclosure
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Legal Proceedings That Are Not Criminal
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Car Leasing
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Protection against death via prepayment
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Taxes on Income
The SCRA Offers Many Benefits
SCRA offers many benefits and safeguards. These are some of the most frequently asked questions about the SCRA benefits program.
Lower Interest Rates
The SCRA places a 6% annual interest limit on debts that were incurred before enlistment. Active-duty service members are not allowed to pay interest rates of more than 6 percent from creditors.
This lower rate of interest is available to those who are
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Cash advances
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Mortgages
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Equity loans for a home
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Loans to College
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Money for cars
Financing Off-road Vehicles
Creditors may lower the interest rate of a Servicemember if they receive written notice and a copy a Servicemember’s active duty orders.
A court can reduce the interest rate to 6% if it finds that the debtor was not “materially impaired” by military service.
Military personnel are protected from default judgments
A Servicemember who fails to appear before a court can prevent a default judgment from being entered against him until an attorney has been appointed by the court to represent his interests.
A delay or stay may also be granted if the person is away for more than 90 consecutive days because of military service.
Cancellation of an Apartment Lease
A person who joins the military can give their landlord 30 days notice and then move out of their home. In that a PCS order requires the person to move permanently to a new place, it is similar to a assignment order. A Permanent Change of Station Order is required to transfer to a new duty post.
You can terminate your apartment contract if you are served outside the United States for more than 90 days.
Cancellation of a Lease for a Car
The SCRA allows service members to cancel their vehicle lease without penalty if they are called to active duty for more than 180 days after signing a vehicle leasing agreement. You can also terminate your lease if the SCRA allows you to cancel your contract if you are issued PCS or deployment orders requiring you to be outside the United States for 180 or more days.
Nonjudicial Foreclosures are placed on Hold
Without a court order, a lender cannot foreclose upon a home that was purchased prior to enlistment. This protection is available in states where nonjudicial foreclosures can be performed without the need of a court order.
The foreclosure postponement package includes “tail coverage”. This means you’ll be covered up to one year after your military separation.
Other Benefits
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Spouses of active duty service members can submit their federal income tax returns from either their Home of Record, or their spouse’s current station.
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Service members who move to an area without internet, phone or cable service for more than 90 consecutive days are eligible to cancel their service without penalty.
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A service member’s spouse may die while in the military. The surviving spouse can terminate the lease.
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A request to SCRA protection can not be used by a lender as a reason for refusing credit or changing the terms of an existing loan.
Eligibility to SCRA
To qualify for SCRA benefits, you must be serving. Any member of the National Guard and Reserves who received orders to report for active duty for at least 30 days is eligible.
All personnel in the Army, Air Force and Coast Guard as well as Marines and Navy, are subject to the law no matter where they may be stationed, even combat zones.
Members of the immediate family or dependents of a Servicemember are eligible for many perks and protections.
SCRA Eligibility Period Starting and Ending
Your SCRA eligibility begins on the first day you serve your active duty commitment. It ends 30 to 90 days after your separation from active duty. The SCRA protects a service member for tax collection and property sale purposes for 180 days.
The date that members of the Reserve and National Guard receive mobilization orders determines their eligibility. Even if you don’t report for duty or are not paid, the SCRA still protects you.
All the Paperwork
Your purpose will determine the paperwork required to apply for your SCRA rights or to use them. For instance, to request a lower interest rate you might need to complete a form at multiple institutions.
At the minimum, you will need to submit documentation regarding your active duty orders. A letter from your superior officer detailing how long you served.
A database called the Defense Manpower Data Center (DMDC) can be accessed by the Department of Defense to determine if a person is currently in the military.
Making a significant impact
SCRA benefits are subject to the requirement that you be “materially affected” by military service. Each case will be considered individually. You can contact your installation’s legal support office to learn more about your rights under the SCRA.
Implementing SCRA
The SCRA protects many members of the military community, but this is not always true. To receive benefits and safeguards, you may need to take initiative. For example, you might file an SCRA claim to relief.
You should seek legal advice if you need assistance in deciding what to submit for a petition asking for relief in a court procedure, an insurance claim or a tax audit.
Debt financing through loans and charge cards
You may be eligible for a lower interest rate on loans and credit cards if you have the SCRA. However, you will need to request this in writing and show documentation that you are serving in military service.
The discount applies only to debts existing before you joined the military.
Breaking Leases
To cancel a lease on a vehicle or home, a member of the armed force must give written notice and a copy their military orders. There may be a different procedure depending on the business. Calling them will give you the best insight into their business.
Myths around the SCRA
There are many misconceptions that can be avoided, in addition to the real benefits enjoyed by active-duty personnel due to the SCRA. These are just a few of the misconceptions that need to be avoided.
The SCRA will apply in all cases.
The SCRA doesn’t automatically grant you help. You may be eligible to receive certain protections under SCRA if your duty is “materially modified” by your military service.
It’s a good idea for you to speak with your legal counsel before filing a claim under SCRA.
All dependents are covered by the SCRA
All members of the family are treated equally as Servicemembers. The active duty service member must meet certain requirements to be eligible for the SCRA’s benefits and protections. It is highly recommended to consult a lawyer with experience in the SCRA.
You cannot waive your rights under the SCRA
While you can legally waive your rights as a member of the military, it is not recommended. Before signing the SCRA, make sure to read the waiver thoroughly and seek advice from a military lawyer.
Criminal proceedings are covered under the SCRA
The law does not apply in criminal cases, but only to civil proceedings like landlord-tenant conflicts and child custody. For example, in the case of DUI, the SCRA is not applicable.
The SCRA protects National Guard and Reserve personnel’s access to civilian employment opportunities.
The Employment and Reemployment Rights of Veterans Act, (ERROV), governs civilian employers’ rights and responsibilities regarding military personnel.
Conclusion
The rights and privileges of SCRA beneficiaries have been significantly increased. It can save you money and allow you to tailor them to your specific circumstances. To maximize your legal protections, get legal advice while serving in military.