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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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