The Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act, also known as the SCRA, is a federal act that ensures financial and legal protections to servicemembers during active duty and military service. However, as the name implies, the SCRA also provides protections for reservists and those who have received their call-up orders but have not yet reported for duty. The SCRA is an act to aid those in active duty and reservists, legally and financially, secured by federal law or the government.
Federal SCRA provides servicemembers with a wide range of protections that can cover situations such as foreclosure, property seizure, available loans, civil judicial cases, life insurance payments, interest rate caps, eviction, and many more.
Some states have passed their own set of laws that give additional protections to safeguard the rights servicemembers can exercise. Before anything else, lenders, litigants, landlords, attorneys, and anyone seeking legal recourse against an active duty servicemember should research the different state laws, local laws, and requirements.
The SCRA Central Verification Service
To obtain access to SCRA protections, servicemembers must verify military status with due diligence. Any military members seeking collections, repossessions, foreclosures, or court judgments against a debtor should tread carefully to avoid harm to servicemembers and to avoid any fines or penalties they may incur. You need to investigate if the person is protected by the SCRA.
What is the difference between the SCRACVS and the DMDC?
Servicemembers must present evidence in court that an adequate search for military status was completed. The main difference between the SCRACVS and the Department of Defense Defense Manpower Data Center, or DMDC, is highlighted. The SCRACVS verification method is more efficient than the DMDC or even writing directly to military branches.
Writing to different military branches will take months to get any results. Adding to the inconvenience, some branches of the armed forces can no longer process active military duty requests because of an apparent lack of resources. Most service people will use SCRACVS over DMDC, as SCRACVS offers affidavit services and customer support through phone and online chat.
Why do you need the SCRA Centralized Verification Service (SCRACVS)?
This military status verification is conducted to determine whether or not a person is on active military duty. Courts will require these verifications to determine, first and foremost, if any person seeking these protections is entitled to the certain protections afforded by the SCRA.
The end goal of the SCRA is to grant peace of mind to servicemembers on active duty, free of worries of evictions, foreclosures, default judgments, and any other legal actions that may be taken against them while they serve their country. The SCRA ensures the legal and financial rights of servicemembers.
If a servicemember on active duty is called to court and cannot appear due to their military service, the court may enter a default judgment. A default judgment is a ruling granted by a court or a judge in favor of any plaintiff against a defendant in a legal case that does not respond to their court summons and fails to appear in court. Before this ruling is granted, a judge will almost always require that the plaintiff- who may be a landlord, a debtor or any other person seeking legal recourse- submit a military affidavit.
Other names for this affidavit include:
- Non-military affidavits
- Affidavits of military service
- Affidavits in compliance with the SCRA
Through this military affidavit, the plaintiff swears that they have completed the military status verification that shows whether or not they are on active military duty.
The SCRA Affidavits provide information to courts and institutions as solid proof that a plaintiff has complied with the terms of the SCRA. While the SCRA is there to offer protections to servicemembers, it is essential to remember that it does not provide blanket protection against all judgments. Any servicemember involved in a court proceeding should immediately consult an attorney for professional legal advice.
The SCRA is available to all military servicemen, but certain available rights are conditional upon the concept of being materially affected by military service.
What are the protections the SCRA grants?
The SCRA affords legal and financial protections for military personnel and their families. The protections cover a wide range, including life insurance, mortgages, and more. Before anything else, military personnel should attain professional advice on how the SCRA applies, especially in specific and individual circumstances.
Here are some of the specific protections the SCRA grants to servicemembers:
- Interest rate reductions on pre-service loans to a maximum of 6 percent.
Any servicemember who took out automobile leases, home or student loans, or even incurred credit card debt before enlistment is considered a pre-service obligation. Any serviceman who took out any of these loans is entitled to a reduction of their interest rate to a maximum of 6 percent per year. Before receiving this benefit, the servicemember must inform their lender through writing and include a copy of their orders for active duty from their commanding officer that indicates the starting date of their active duty service.
For pre-service obligations on most loans, including mortgage interest rates, the rate reduction applies during the period of active duty service. Once the request for removal on the interest rate for a pre-service obligation under the SCRA is lodged, the lender is then obliged to reduce the interest rate for the time the servicemember is serving their active duty service. Interest above six percent can no longer be added back into the loan after the active duty period ends. The rate reduction also applies to credit card interest rates. This rate reduction can be requested from the lender at any time during active duty and up to 180 days after release from service.
Lenders cannot revoke credit or loan accounts, change the terms of the credit or refuse to grant credit to servicemembers upon the exercising of SCRA rights. Lenders also are disallowed when they provide information to a credit reporting company for the same reasons. However, the SCRA only holds the lender to this reduction in interest rate in certain circumstances, and servicemembers must still repay all debts to lenders.
- Protection against foreclosures
If a servicemember took out a loan on a home before entering active service, their property is ensured against foreclosure without a court order, unless the servicemember has waived their rights. This protection applies while the servicemember is on active duty service and for an additional period of up to one year after leaving active service.
The protection against foreclosures still applies in states that don’t require a court order to foreclose on a property and whether or not the servicemember informed their lender or servicer about their duty status.
Through this SCRA protection, a court may also autonomously or through the request of a servicemember choose to pause or stay a foreclosure proceeding, or adjust the terms of rental agreements, as long as the servicemember’s ability to pay off the loan is materially affected by their active duty service. The protection extended against default judgments also applies to foreclosure cases presented before a judge in court.
- Protection against default judgments
As mentioned in the previous item, servicemembers are protected from default judgments under the SCRA. If a service member is sued while away on active duty, they are covered by legal protections under the SCRA, particularly by the right against default judgment in a civil action. There are several rights secured for servicemembers under the SCRA.
Before the court can declare a default judgment, the plaintiff must file an affidavit with the court that states whether or not the serviceman, or the defendant, is in active duty service or not. Any servicemember on active duty service who fails to appear in court is protected against a default judgment ruling until the court can appoint an attorney to represent the servicemember. Finally, the court must also issue a stay on proceedings for at least three months or 90 days if these conditions are met.
- Deferment of income tax payments
The Internal Revenue Service and state and local taxing authorities must defer your income taxes that are due at any point before or during a servicemember’s military service if the ability to pay off the income tax is materially affected by their military service.
The SCRA also ensures that no interest or penalties can be added to the servicemember’s income taxes after requesting this type of deferral.
- Prevention of eviction
Similar to the last item, a servicemember and their family cannot be removed from their property for nonpayment of rent without a court order, regardless of the terms of the loan or local laws. The protection applies to servicemembers living in residences where the rent falls under a certain amount, the exact figures of which vary. Servicemembers are advised to contact their closest legal assistance office for the latest statistics.
If a service member or their family’s ability to meet rent agreements is materially affected by military service, the servicemember or their family can then apply to court. The court is then obliged to either grant a 90-day stay on eviction proceedings or adjust the terms of the loan so that both parties can find a compromise.
- Postponement of civil judicial proceedings
A civil court proceeding begins when a plaintiff or representative attorney files a complaint through a district, municipal, or branch court. After the complaint is filed, a court must serve a defendant with a duplicate and requires the defendant to file their written answer within 30 days or one (1) month.
If a servicemember is unable to participate in either a civil judicial proceeding or administrative proceeding due to their active military status, they can then request a 90-day stay on the proceeding. A service member can automatically use this postponement if all requirements are met. These proceedings can include actions for child paternity and support cases, divorce, and foreclosure proceedings. However, this protection does not apply to any criminal court proceedings or criminal administrative proceedings.
- No penalty on termination of residential house and automobile leases
Servicemembers have the right to terminate residential leases of property they occupy or plan to occupy under the SCRA, which also protects any dependents the servicemember may have. If the servicemember signed a lease on any housing before their active duty period, serving on active duty, and then received a Permanent Change of Station or PCS, or their deployment orders are for a period of at least 90 days, the servicemember will be able to terminate their housing lease without risk of penalty.
To begin the process of termination on a servicemember’s housing lease, they or a similar figure exercising a power of attorney on behalf of that same servicemember must submit a written notice of termination, a copy of their military orders from their commanding officer, either hand-delivered or via return-receipt mail or through electronic means such as e-mail, to their landlord.
Suppose the servicemember’s lease agreement determines the necessity of monthly rent payments. In that case, the termination of their housing lease will be placed into effect precisely thirty (30) days after the initial indicated date on which the next rental payment becomes due and payable after the first date on which the termination notice is sent to the service member.
On top of protecting the servicemember’s residential lease termination without penalty, the same protection extends to automobile leases. The SCRA protects servicemembers that cancel or otherwise definitely terminate their auto lease without risk of paying any early termination fees or penalties.
To begin the process of terminating an auto lease without falling under penalty with the SCRA protection in place, a servicemember must fulfill the following criteria: the servicemember must have been called into active duty service for more than a hundred and eighty (180) days; received their orders for assistance in any location outside the continental United States to an area outside of the continental United States, or from CONUS to OCONUS. Deployment orders received while the servicemember is already outside the continental United States also fall into this criteria. Finally, the deployment with a uniformed or military unit or even in support of a uniformed or military operation must last more than a hundred and eighty (180) days.
- Suspension of professional liability insurance
For professionals in health care or legal service or a similar profession as determined by the Secretary of Defense that then receive military orders, the option to suspend their professional liability insurance policies is available.
A written request to the chosen insurance carrier must be made to suspend this liability insurance (health insurance or similar insurances). Premiums do not have to be paid for the suspended insurance by the servicemember while on active duty, and any premiums they may accumulate while on their military service must be refunded.
Once the servicemember chooses to resume their suspended insurance, they must send a request to the insurance carrier stating their intent to reinstate their insurance within thirty (30) days of release from military service.
Can a servicemember waive their SCRA rights?
In some cases, servicemembers may waive their rights under the SCRA. If this action is taken, servicemembers must sign a waiver during or after their active military service is rendered effective.
If the waiver of the servicemember’s SCRA rights is signed before the beginning of their active service, or the provision is contained in another document (as opposed to a stand-alone document) it is considered invalid. Therefore, it is important to note that servicemembers should read over their waiver carefully and sign only with the professional legal advice of a qualified attorney.
The SCRA is a versatile and valuable legal and financial protection system for all servicemember’s peace of mind so that they can serve their country without having to face the added stress of what might be happening to their families while they are away.
The SCRA is a complex public law, and any servicemembers seeking to use their rights afforded to them by the SCRA should speak to an Armed Forces Legal Assistance Attorney beforehand. It is also a good idea to talk to a legal professional before waiving any rights the SCRA may ensure.
Consulting a legal assistance office with due diligence regarding requests for relief in legal matters like insurance, taxes, lawsuits, or court appearances is a good first step for any servicemember. Before requesting the relief act, servicemembers must include a copy of their military orders and then deliver that notification by courier, private business carrier, or certified return receipt mail to the intended party.