Service men and women who
are active in the United States armed forces are providing a great
benefit to the country and have been issued protective legislation to
make sure that their financial responsibilities in addition to their
legal rights are secured. The legislation is known as the Soldiersí and
Sailorís Civil Relief Act of 1918 or the SSCRA. Changes were made to the
original Act in the 1940s to prevent the legislation from expiring.
On December 19, 2003, President Bush signed an enhancement to the
original protection, which is now called the Servicemembers Civil Relief
Act or the SCRA.
Reservists and service members of the National Guard are included in the
protections that the SSCRA offers in addition to all service members
place on active duty. Furthermore, military personnel can expect to be
covered from the first day of their active duty and will receive
protection from the SSCRA for 30 to 90 days following the date of
discharge from active duty.
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Protections include the canceling of leases and rental property used for
a residence, business or cultivation. The agreement must have been
signed before the start of active duty, and the location must have been
used by the service member or his or her dependents. It should be noted
that, under the SSCRA, a lease agreement can only be canceled when the
lease was signed before a notice of active duty, not after.
Service members who receive orders to move bases permanently can cancel
a home lease. This provision is also in effect for those who are
deployed to a new area for 90 days or longer.
Military personnel may be protected from eviction by the SSCRA. If a
rental property is providing a residence for service individuals or
their family members and the rental costs are $1,200 or less, then the
service member can request protection against eviction. In some cases,
military orders can affect a service personís ability to provide
The SCRA has expanded this protection to include todayís higher cost of
living and service members can now be covered for monthly home leases up
to $2,932.31. Furthermore, the new Act will be updated yearly for
inflation. However, a landlord must be given written notice and can
charge rent to the service member for 30 days after the next rental is
due. For instance, a written notice is sent to the landlord on February
12th and the next day rent is due is on March first, the service member
can be charged rent until March 31st.
Interest Rate Protection
Service members can also request an interest rate limit of six percent
for debt obligations. Approved debts that fall under this area of
financial protection are bills that were accumulated before the military
member was assigned to active duty. Furthermore, the military person
must be serving on active duty when requesting the interest rate limit.
The creditor is not allowed to charge a service member excess interest
after they leave active duty, and the monthly payment will be lowered by
the total amount of interest deducted each month during a service
members military activation.
The service member is instructed to reach creditors in writing when
making the interest rate cap request. Furthermore, the official orders
can be sent to the creditor verifying the military requirement. However,
a creditor can ask for a court review if he or she believes that the
service member is not financially impacted by the military orders.
Service members can be granted a stay when they are included in civil,
bankruptcy, child custody or paternity lawsuits. Courts generally wonít
grant this provision in legal proceedings that require action such as
discovery or depositions. However, if a judgment is set against a
military member who is serving at the time of the judgment, then it may
be possible for the service member to have the judgment thrown out.
This specific provision cannot be used for cases involving criminal
proceedings, child support resolutions or when the military member is a
witness. Service members who are involved in legal matters are advised
to have their civilian lawyer contact a Military Legal Assistance
Attorney to ensure their case is handled properly.
Service personnel may request protection through the SSCRA for prior
debts involving auto leases in which active duty has prevented the
military member from fulfilling his or her financial obligations. In
order to qualify for this provision, a minimum of one deposit or payment
must have been covered on the contract before entering active duty. If
the contract qualifies, then the lender is unable to repossess the
vehicle or cancel the contract, unless a court has approved this action.
Military personnel may ask a court to suspend taxes or other assessments
that may have been incurred prior to active duty. In this situation, a
court may approve a stay, which would prevent fines from being charged
to the service member.
The SCRA also prevents military members from double taxation. This
situation can happen when service members are married and their spouse
is employed and taxed in a separate state from their permanent home
residence. The SCRA will stop states from using a military personís
income to determine the tax rate in the state where their spouse works.
However, military pay is taxed in some states and service members will
have to pay taxes on their pay in these states.
Private Health Insurance
Military personnel who are self-employed and purchase health insurance
are entitled to temporarily cancel this coverage when they are placed on
active duty. Upon returning from active duty, the private health
insurance carrier is required to reinstate military memberís health
coverage under the SCRA.
Life Insurance Benefits
Under the extended SCRA benefits, activated military personnel have
received an updated life insurance protection from $10,000 to $250,000,
which is the highest amount that the government will cover for default
of nonpayment while a service member is out on active duty.
In providing these protections to the men and women who serve in the
military, the country is showing its appreciation for those who put
their life on the line for others.
Want to read the actual US
Code 50 Regulation? Reference the Sailors' and Soldiers' Relief