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SSCRA> The Soldiers &
Sailors Relief Act; scope of protection
Authority. Title 50, Appendix, United States Code, Sections 501-593.
Many times families encounter financial difficulties
when a spouse travels overseas while in the military. There is an
Act that protects you and your family during this time. It's called
the Soldiers & Sailors Relief Act. This act protects military
personnel and their families from evictions, foreclosures, repossessions
and debt collections while the person is unable to meet his or her
expenses because they are serving duty away from home.
Under the provisions of the Soldiers and Sailors
Relief Act of 1940, you may qualify for any or all of the following:
-Reduced interest rate on mortgage payments.
-Reduced interest rate on credit card debt.
-Protection from eviction if your rent is $1,200 or less.
-Delay of all civil court actions, such as bankruptcy, foreclosure
or divorce proceedings.
The protection generally begins on the date of
entering federal active duty and terminates within 30 to 90 days
after the date of discharge from active duty. This protection does
not include debts you incurred after release from active duty. The
protection is specifically in place to protect you and your family
from eviction, foreclosure and exclusion of debt collection. This
Act has its limitations and does not cover verbal agreements. The
law is intended to protect your assets and your family's well-being
but does not excuse you from debts. It merely delays the collection
of those debts until you are finished with active duty. It's important
to understand that the Act protects you in very limited ways and
is not an end-all to your owed debts. You are still liable to pay
your debts but are afforded somewhat of an extension and leniency
while on active duty.
Your credit suffers however…
Unfortunately while the Soldiers and Sailors Relief Act may protect
you from collections and lawsuits while on active duty, it does
not, however, guarantee that you will not suffer the creditors'
wrath via your credit reports. Sure the loan may be deferred or
your local bank may put it on hold but it may not stop the delinquency
from being reported on your credit reports and ruining your good
credit. You can take steps to avoid this detrimental mistake.
-Get all deferments or agreements in writing before
you leave for duty.
-Get a copy of all three credit reports and review payment history
before and after.
-Have a spouse or trusted family member receive all bills and communications
with creditors.
-Set up a temporary power of attorney with a trusted family member
to control your accounts while gone.
Scope of Protection
The Soldiers’ and Sailors’ Civil Relief Act of 1940 (SSCRA), as
amended, was passed by Congress to provide protection for individuals
entering or called to active duty in the military service. It is
intended to postpone or suspend certain civil obligations to enable
service members to devote full attention to duty. The Act applies
to the United States, the states, the District of Columbia, all
U.S. Territories and in all courts therein. Reservists and the members
of the National Guard are protected under the SSCRA 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.
What's in it for me?
Experience in the Middle East and the ongoing mobilization of active,
reserve, and guard personnel gives emphasis to the need for awareness
of The Soldiers’ and Sailors’ Civil Relief Act of 1940 (SSCRA),
and to know what it does and does not grant. Over reliance on bits
and pieces of the Act taken out of context may be worse than not
knowing any of its provisions. Before you assert its protections,
please read further and ask yourself how the provisions affect you.
It is helpful to understand the collective thinking of Congress
when the law was enacted, because the courts will consider the intent
of the drafters when reaching decisions. As you can see from the
date of the Act, the storm clouds of World War II were on the horizon,
and the draft was becoming reality for a number of working Americans
facing the prospect o going off to a foreign land to fight. Our
legislators recognized that citizen soldiers and sailors should
not be worrying about finances, lawsuits, evictions, and similar
troubles back home, when it is of paramount importance to focus
on the mission. Furthermore, low military pay and benefits were
a shock to those accustomed to a higher standard of living than
beans and barracks. What came out of this was legislation which
dramatically alters the rights of military personnel and creditors;
but there are some catches.
One item your eyes or ears may have detected is
a six percent interest limitation on debt obligations. That goes
down pretty well, doesn’t it? Well, don’t start running up those
charge accounts with the thought the creditor can’t collect its
stated interest rate. What the law says is this: Obligations
incurred by a military member prior to entry into military service
shall during such service bear interest at a rate not exceeding
six percent annually, unless a court (usually a state court where
the military member permanently resides) determines that the military
members’ ability to pay did not change in any significant manner
due to activation. The burden is on the creditor seeking rate modification
of the statutory six percent rate to bring the matter to the court’s
attention. However, if it can be shown that your making about the
same pay you received as a civilian when the debt was incurred,
you can expect to pay the higher rate.
The court appears to have the latitude to assess
an interest rate over six percent if it feels you can afford to
pay, although it comes to less than the original rate. You should
note the law does not cover obligations incurred during military
service. It addresses the hardships created by being called to active
duty. Provisions of the act apply prior to mobilization. This benefits
reservists and guard personnel by allowing them time to begin invoking
rights upon notification of activation. For example, renter-reservist
being mobilized can give notice to the landlord of that fact and
break a lease which is otherwise binding for a stated term. The
notice must be in writing and given to the landlord or his agent.
It may be submitted personally or mailed through the U.S. mail system,
so avoid foreign mail drop boxes. Keep a hard copy of the notice
and a record of the date sent or delivered. The notice is effective
30 days after the date the next rental payment is due.
Therefore, if the rent is normally due the first
of the month and you delay and do not get the notice mailed until
October 15, you are on the hook for rent until at least December
1. The ability to cancel leases applies to business and agricultural
premises as well as dwellings. The landlord has the ability to apply
to a court for relief to modify or restrict this relief entitlement.
A landlord who wrongfully seizes the military members property for
rent, after lease cancellation is effective, is subject to criminal
sanctions. Violation of other SSCRA requirements also entails criminal
penalties, including jail, so creditors are apt to be cautious.
If the military member elects to have family remain in the rented
dwelling he or she occupied as a civilian, there are protections
against eviction of his or her dependents. However, this benefit
is limited under the statute and applies only to premises where
the agreed monthly rent does not exceed $1,200, and is occupied
as a dwelling by the member’s dependents. This part of the Act does
not apply to business premises. Again, a landlord can seek a court
finding that the member is able to pay the rent, or that the landlord
should have other remedies.
The statue, at most, authorizes a court withholding
action for up to three months, unless military service does not
materially affect the member’s ability to pay the rent. An allotment
of military pay is authorized to discharge rent. The landlord may
be entitled to protection against foreclosure brought about by the
military member’s non-payment of rent. Foreclosures of mortgages
and trust deed are precluded, unless a court determines that the
member’s ability to pay is not materially affected by military service.
There are similar provisions for real or personal property purchase
contracts to prevent sellers from declaring a default or exercising
an option to terminate the agreement for nonpayment resulting from
military service. Such contract or obligation must have been incurred
prior to service. A court has the authority to determine if failure
to pay or meet obligations results from military service. A court
also has the authority to order repayment of prior installments,
as a condition of termination.
Legal proceedings are generally held in abeyance
("stayed") while the military member is unable to appear
by reason of military service. It should be noted that a member’s
mere unwillingness to take leave in order to take care of legal
proceedings does not mean the same thing as inability to appear
due to military service. Mission requirements that prevent you from
taking leave do constitute an inability. Judges are given wide discretion
to make determinations on whether or not a person’s military service
did in fact impact various areas covered under the SSCRA. There
are restrictions against entry of default judgments while a military
member is unable to appear to defend a lawsuit. On the other hand,
the period of time within which a person must normally be sued (statute
of limitations) is extended for the delay due to military service.
Courts are given the authority to appoint attorneys to represent
the interests of the absent military member so that proceedings
may continue. An attorney so appointed would be expected to communicate
with the military member before proceeding further with the case.
There are a number of other miscellaneous provisions
not specifically addressed here. For example, enforcement of a preservice
judgment may be suspended. The period for payment of income tax
obligations may be extended until six months after release from
duty, without interest or penalty, if the ability to pay the taxes
was curtailed by military service. Check with your unit tax representative
or a legal assistance attorney for information on tax exclusion
zones and other tax/military related questions. There are also important
provisions to keep life insurance coverage active in spite of nonpayment
of premiums. Rights of military members under the SSCRA may be waived
after activation, so be careful with what you may be asked by your
creditors to sign. Read it first. If you honestly feel your ability
to pay your undisputed debts is not adversely affected by your call
to military service, it is probably best to keep making payments
at the prior contract rate. Bear in mind that all persons subject
to the Uniform Code of Military Justice are expected to honor just
obligations and to support dependents. The exceptions are founded
upon provable hardship. Creditors will hopefully be understanding
and willing to make adjustments in appropriate cases.
Be aware of the Soldiers’ and Sailors Civil Relief
Act. It is designed to help you with your personal and financial
affairs if you are encountering difficulties and distractions as
a result of sudden activation and mobilization. The protections
under the SSCRA may also extend to dependents and persons secondarily
liable on your debts. A misunderstanding or abuse of its provisions
may harm not just yourself, but reflect negatively upon all members
of the armed forces. Avail yourself of its provisions in a wise
and prudent fashion, and seek further legal counsel from your local
judge advocate as necessary. Our hope is that you anticipate and
prevent legal problems before they occur.
-FOR MORE INFORMATION ON THE SSCRA CONTACT: Joint
Services Pentagon Legal Assistance Office 2201 Army Pentagon (Room
1D738) Washington, District of Columbia 20310-2201
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