Know Your Rights: Guide To Military Debt Collection Laws

outstanding credit card debt

Dealing with debt collectors can be an overwhelming and stressful experience for anyone, but for military personnel, it can have an even greater impact on their ability to fulfill their duties. Thankfully, there are legal protections in place that offer assistance to service members and their families when it comes to managing unpaid debts.

It is crucial for military members to have a comprehensive understanding of these legal safeguards, as they enable them to fully exercise their rights and concentrate on their responsibilities without undue distraction.

How Military Debt Differs From Civilian Debt

Military debt is similar to civilian debt, but a military personnel’s lifestyle might cause them to incur more debt. Why? An individual on active duty may be tasked to relocate at least once in their military career. While the government may take care of the military personnel’s transportation needs, the same cannot be said for the rest of their dependents.

It is common for a person serving in the military to be deployed in different stations. Frequent relocation can be expensive, and some military members may struggle to meet the financial obligations of these moves. While the military pays its servicemembers well, there may be instances when they struggle to make payments for personal property. This results in military debt.

What Are The Different Military Debt Collection Laws?

Servicemembers Civil Relief Act (SCRA)

The Servicemembers Civil Relief Act (SCRA) is a federal legislation that offers comprehensive legal and financial safeguards to military personnel. While serving on active duty, military members are protected from outstanding credit card debt, taxes, car repossession, lease terminations, etc.

When activated in a proper and timely manner, the SCRA provides military personnel with the freedom to focus on their duties. The Servicemembers Civil Relief Act Centralized Verification Service (SCRACVS) can help military members fully leverage the provisions offered by the SCRA.

Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) provides protection against unfair, deceptive, and abusive collection practices. This law bans a debt collector from telling your commanding officer about your outstanding debt, reinforcing that they don’t have the security clearance to harm your employment status and threatening you to take action they’re not authorized to pursue.

This law prohibits a debt collector from communicating with a service member at unusual times (before 8 in the morning or after 9 in the evening). It also bans them from using vulgar language, violence, or harassment during debt collection.

The FDCPA gives service members the right to have limitations on communication with debt collectors. Moreover, default judgments and debt collectors would not threaten their employment status.

Consumer Financial Protection Bureau (CFPB)

The Consumer Financial Protection Bureau (CFPB) is a US government agency that emphasizes consumer protection in the financial industry. The Office of Servicemembers Affairs (OSA) of the CFPB assists military families in overcoming various economic problems.

The Office of Servicemembers Affairs offers invaluable support to military families by providing educational resources, overseeing complaints, and working with relevant institutions to address financial challenges faced by service members. The CFPB helps them understand their legal rights to navigate financial woes better.

The Military Lending Act (MLA)

The Military Lending Act (MLA) provides active-duty service members, their spouses, and dependents with special protections, such as limiting their annual interest rates for select loan products.

This law stipulates that the interest rates for different kinds of loans will be capped at 36% annually. This cap includes the calculation of the interest rate itself.

Challenges And Issues With Military Debt Collection

While there are legislations that push for just financial obligations, the reinforcement of these legal protections can be challenging. Some military personnel may not know their legal rights and fail to take advantage of their financial protections.

If these laws, agencies, and programs are not safeguarded, many service members might fall into debt and find it difficult to focus on their work. Knowledge is power, and knowing one’s rights against debt collectors can empower military individuals to take action.

Knowing Your Rights: What Debt Collectors Can’t Do

If you’re a servicemember, protecting yourself from aggressive debt collection practices is crucial. Remember that debt collectors have limitations on what they can do. They are not allowed to:

  • Set timelines and make threats
  • Harass you at work
  • Tell others about your debt
  • Garnish wages
  • Collect expired debts
  • Improve your credit rating
  • Force you to pay deceased relatives’ debts


a note that says pay debt next to a pen and glasses

Various legal protections provide military members support to meet their financial obligations accordingly. Understanding these rights is key to solving one’s money woes. Fortunately, organizations dedicated to helping them reinforce their rights.

For example, the CFPB offers educational materials and counseling for them to understand their rights better. SCRACVS offers assistance for them to maximize the SCRA as well.


What happens to debt when you join the military?

You would still have to pay your debts. However, some protections may ease the financial burden.

Does SCRA apply to debt collectors?

Yes, the SCRA is applicable to debt collectors, landlords, and creditors. However, the person in question must be on active duty for the protections to apply.

How much debt can you have in the military?

There is no cap on how much debt you can have, as it generally depends on the person. However, it is important for military personnel to maintain a responsible approach to managing their finances and debt obligations.

Can veterans get SCRA?

The SCRA only includes service members on active duty. Veterans have other legal protections to help them.

Can debt collectors sue active duty military?

Yes, they may pursue legal action. However, they must follow due process to pursue a case.

Similar Posts