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Servicemembers Civil Relief Act Overview
The Servicmembers Civil Relief Act (SCRA) was enacted in 2003 as a revision and expansion to the 1940 Soldiers’ and Sailors’ Civil Relief Act. The SCRA aims to provide servicemembers with financial protections while they are serving in the military.
Rental agreements, security deposits, prepaid rent, evictions, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, civil judicial proceedings, automobile leases, life insurance, health insurance and income tax payments are all covered by the act.
Which Protections Exist Under the Servicemembers Civil Relief Act?
Several protections are offered to military members under the Servicemembers Civil Relief Act, including interest caps, civil court stays, default judgement protections, residential protections, and more.
Under SCRA, servicemembers can only be charged up to 6 percent per year, including most fees, on any financial obligations which were incurred before they entered military service. A creditor must forgive this interest retroactively and is not allowed to accelerate principal payments in response to the cap.
The six percent interest cap applies to a variety of loans including: credit cards; automobile, ATV, boat and other vehicle loans; mortgages; home equity loans; and student loans.
The SCRA also provides protections against default judgements. In a civil court proceeding where the servicemember doesn’t make an appearance, the creditor is responsible for filing an affidavit stating whether or not the servicemember is in military service or whether the creditor is able to make this determination. The Department of Justice notes that these protections often apply to judicial foreclosure proceedings – i.e. foreclosures which involve a court process.
Non-judicial foreclosure proceedings also have protections under SCRA. Under the act, a creditor must get a court order before foreclosing on a servicemember mortgage during a period of military service or for a “tail coverage” period after the service period. Failure to follow these guidelines can result in fines and even up to one year of jail time.
The tail coverage period has changed over time, as summarized below:
- Dec. 19, 2003 to July 29, 2008: 90 days
- July 30, 2008 to Feb. 1, 2013: Nine months
- Feb. 2, 2013 to Dec. 31, 2015: One year
- Jan. 1, 2016 to present: One year
Under SCRA, servicemembers and their dependents are also allowed to terminate their lease in the event of a military service deployment or permanent change or station. These benefits also apply to servicemember spouses whose significant others die in the course of military service. Servicemembers can cash in on these benefits by providing submitting a written notice and a copy of their military orders or a letter from their commanding officer.
Other SCRA protections include terms regarding installment contracts and repossessions. A creditor may not repossess a vehicle during a borrower’s military service unless they have a court order. These restrictions apply as long as the servicemember borrower placed a deposit for the vehicle or made at least one payment before entering military service.
The final benefit under SCRA is enforcement of storage liens. This niche protection prohibits a person who holds a lien on the property of a servicemember from enforcing the lien without a court order during military service or 90 days afterwards. The Justice Department notes that this could apply to storage facilities or tow companies.
What Kind of Lawsuits Can Be Filed Under the Servicemembers Civil Relief Act?
If people or entities violate this law, the Attorney General is authorized to file a federal lawsuit over the issue. Even if violations did not occur, the Attorney General has the ability to take action when the situation includes “an issue of significant public importance.”
Through a Servicemembers Civil Relief Act lawsuit, the Attorney General can recover monetary damages for servicemembers in addition to civil penalties, equitable relief, and declaratory relief.
Do You Have a Claim?
Servicemembers who have experienced violations of SCRA protection may have a claim. The Department of Justice encourages servicemembers and their dependents to seek reliable SCRA advice to see if the law applies to their situation. Servicemembers can also contact their local military assistance offices for information.
Those with a genuine SCRA violation on their hands may be able to file a civil claim. Consulting a knowledgeable SCRA attorney can help servicemembers choose the best course of action.
