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The Servicemembers Civil Relief Act (SCRA)

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The Servicemembers Civil Relief Act, or SCRA, provides financial and legal protection for active duty service members. It gives military members a wide range of legal protections not available to the general public. 

Who is eligible for the Servicemembers Civil Relief Act?

The SCRA covers all active duty service members, reservists and members of the National Guard while on active duty. The protection begins on the date of entering active duty and generally terminates within 30 to 90 days after discharge.

For reservists and National Guard, the SCRA protections begin when you receive call-up orders. Further, the call-up must be under 10 USC 12406 and exceed 30 days for these protections to kick in.

Spouses of active duty Servicemembers listed where credit is extended to a Servicemember and spouse jointly.

In addition, Public Health Service and National Oceanic and Atmospheric Administration Commissioned Officers. And lastly, U.S. citizens serving with the forces of a nation with which U.S. is allied in the prosecution of a war or military action.

What does Servicemembers Civil Relief Act Cover?

The SCRA can postpone or suspend financial or civil obligations to prevent you from being taken advantage of while on active duty and away from home.

Protections offered by the SCRA:

  • Reduced interest rates — Creditors must reduce the interest rate on debts to 6% for liabilities incurred before you entered active duty. If the debt is a mortgage, the reduced rate extends for one year after active military service. The reduced interest rate applies to credit card debts, car loans, business obligations, some student loans and other debts. This includes fees, service charges and renewal fees.
  • Postponement of foreclosures — No sale, foreclosure or seizure of property for nonpayment of a pre-service mortgage debt is valid if made during or within nine months after your service on active duty, unless carrying out a valid court order. This provides tremendous protections from foreclosures in states that permit foreclosures to proceed without involving the courts. If you miss a mortgage payment, you should contact your legal assistance office immediately.
  • Deferred income taxes — The Internal Revenue Service and state and local taxing authorities must defer your income taxes due before or during your military service if your ability to pay the income tax is affected by military service. No interest or penalty can be added because of this type of deferral.
  • Eviction prevention — You and your family cannot be evicted for nonpayment of rent without a court order. This is regardless of the language of your rental agreement or local laws. This protection applies to residences where the monthly rent is below a certain amount. Contact your nearest legal assistance office for the most up-to-date figures. If your ability or your family’s ability to pay rent is materially affected by your military service. You may apply to the court, and the court must either grant a 90-day delay in eviction proceedings or adjust obligations under the lease in a way agreeable to all parties.
  • Protection against default judgments — If, while on active duty, a civil action, a civil proceeding or an administrative proceeding is filed against you. The judge must appoint a lawyer to represent you in your absence. The court must grant a delay, or stay, of at least 90 days if it determines there may be a defense to the action and the defense cannot be presented without your attendance.
  • Postponed civil court matters — If you cannot participate in a civil court action or administrative proceeding because of your military service, you can request a 90-day delay, or stay, in the proceeding. You are automatically entitled to this delay if you follow all of the requirements. The judge, magistrate or hearing officer can grant an additional 90-day stay. Proceedings may include actions for divorce, child paternity and support cases, and foreclosure proceedings. This protection does not apply to any criminal court or criminal administrative proceedings.
  • Protection for small-business owners — If you own a small business, your non-business assets and military pay are protected from creditors while you are on active duty. This applies to business debts or obligations.
  • Termination of residential lease agreements — You may terminate your residential lease, along with other types of leases including agricultural, professional and business, by delivering a written notice of termination. This applies if you entered into a lease and then started military service, or entered into a lease during military service and then received PCS orders. It also applies when you have orders to deploy with a military unit or as an individual in support of a military operation for not less than 90 days. You must provide a written notice of termination and a copy of your military orders, hand-delivered or by return-receipt mail, to the property owner.
  • Termination of automobile leases — You may terminate an automobile lease under certain specific circumstances. Here are some examples of circumstances: You signed the lease agreement before being called to active duty, signed a lease agreement and then received PCS orders OCONUS, or signed a lease agreement and then received orders to deploy.
  • Termination of phone service — You may request termination of cell phone service or phone exchange service if you entered a contract before receiving military orders to relocate for not less than 90 days to a location that does not support the contract.
  • Prevention of repossession of property — Property cannot be repossessed for nonpayment or a contract terminated for any payment gaps prior to or during your military service without a court order.
  • Life insurance coverage protection — Life insurance companies cannot terminate coverage or require payment of additional premiums if you are in military service. Increases in premiums based on age in individual term insurance is not covered by SCRA. An insurer cannot limit or restrict coverage for any activity required by military service.
  • Suspension of professional liability insurance — Professionals in health care, legal services or another profession, as determined by the Secretary of Defense, called to active duty may suspend their professional liability insurance policy by written request to the insurance carrier. Premiums for suspended insurance do not have to be paid, and any premiums paid by an individual while on active duty must be refunded. To reinstate suspended insurance, the individual must send a request to the insurance carrier within 30 days of release from active duty.
  • Voting rights in your home state — Like your tax residency, your residency for state, federal or local voting purposes is unaffected by your absence from the state due to military service. Similar protections exist for spouses.

Benefits offered by the SCRA:

  • Phone number — You can keep your current phone number even if you cancel your service due to a relocation that lasts less than 3 years. Also, you can put your phone service on deployment hold for $5 a month and activate once you redeploy back to the states.
  • Spouse lease — It allows a surviving spouse to terminate a lease if their partner dies on active duty.
  • Credit Cards — most credit companies waive annual fees for servicemembers. The most popular is the American Express Platinum which waives the $550 annual fee.

Conclusion

Just like the Military Lending Act, the Servicemembers Civil Relief Act provides financial and legal protection for you and your family. Because details of the SCRA are complicated, I encourage you to contact the nearest legal assistance office if you need help meeting financial obligations.

Learn more about the important sections of the SCRA on their website.

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