Service Members - Know your Benefits!

I recently heard about a creditor who is providing 0% interest rates as a benefit to active duty servicemembers who are having difficulty paying their credit card bill. In order to qualify for the additional benefits, the servicemember has to contact their creditor to let them know they are experiencing a financial hardship and they also have to qualify for assistance under the Servicemember’s Civil Relief Act of 2003 (SCRA).

We have listed an overview of the SCRA below, as well as an outline of how to qualify for coverage and what benefits are available. For more information on the program above, or to learn more about benefits available under the SCRA contact a certified credit counselor today. Call 888-864-8659 or click on Get Started Now.

[1] Summary:

The Servicemember’s Civil Relief Act of 2003 (SCRA), formerly known as the Soldiers’ and Sailors’ Civil Relief Act of 1940 (SSCRA), is a federal law that gives all military members some important rights as they enter active duty. It covers such issues as rental agreements, security deposits, prepaid rent, eviction, installment contracts, credit card interest rates, automobile leases, mortgage interest rates, mortgage foreclosure, civil judicial proceedings, and income tax payments. It also provides many important protections to military members while on active duty.

Eligibility:

The SCRA covers all Active Duty servicemembers, Reservists and the 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 the date of discharge from active duty.

Benefit Highlights:

The Six Percent Rule: A Soldier has the ability to reduce consumer debt and mortgage interest rates to 6% under certain circumstances. This applies only to debts and mortgages that were entered into prior to entry on active duty. In the case of mortgages, this reduction in interest extends for one year from release from active duty.

Delay of Court and Administrative Proceedings: The SCRA permits active duty Soldiers who are unable to appear in a court or administrative proceeding due to their military duties to postpone the proceeding for a mandatory minimum of ninety days upon the Soldier’s request. This provision specifically includes child custody hearings. Although the SCRA does not excuse Soldiers from paying rent, it does afford some relief if military service makes payment difficult. Military members and their dependents (in their own right) have some protection from eviction under the Servicemember’s Civil Relief Act (SCRA), Section 301.

Eviction for Nonpayment of Rent: Protects your dependents from being evicted while you are serving your country. If you rent a house or apartment that is occupied for dwelling purposes and the rent does not exceed $2720.95 per month, the landlord must obtain a court order authorizing eviction. This provision applies regardless of whether quarters were rented before or after entry into military service.

Default Judgment Protection: If a default judgment is entered against a Soldier during his or her active duty service or within 60 days thereafter, the SCRA allows the Soldier to reopen that default judgment and set it aside if certain conditions are met.

Life Insurance Protection: The SCRA permits the Soldier to request deferment of certain commercial life insurance premiums and other payments for the period of military service and two years thereafter.

State Taxation Clarification: The SCRA provides that a nonresident Soldier’s military income and personal property are not subject to state taxation if the Soldier is present in the state only due to military orders. The state is also prohibited from using the military pay of these nonresident Soldiers to increase the state income tax of the spouse.

New provisions to the SCRA (called the Military Spouses Residency Relief Act) have been added that may extend similar tax protections to some military spouses. The extension of this protection is contingent upon meeting certain qualifying factors. Local JAG Legal Assistance attorney can help clients determine whether they meet these qualifications. To locate a Legal Assistance office go to: http://legalassistance.law.af.mil/content/locator.php

Health Insurance Reinstatement: The SCRA provides for the reinstatement of any health insurance upon termination or release from service if the insurance was in effect before such service commenced and terminated during the period of military service.

Foreclosures: The SCRA requires a court order before the foreclosure of a mortgage entered into prior to active duty. This protection extends for a period of 9 months from release from active duty.

Seizure of Property: The SCRA requires a court order before a creditor can seize property secured by a purchase contract (specifically including automobiles) or a storage lien entered into prior to active duty.


[1] United States Army. (June 22, 2011). Servicemembers Civil Relief Act (SCRA). Benefit Fact Sheet. Retrieved from: http://myarmybenefits.us.army.mil/Home/Benefit_Library/Federal_Benefits_Page/Servicemembers_Civil_Relief_Act_(SCRA).html?serv=150