When you're off fighting a war, you deserve a break. Have you recently been called up for active duty? Are you preparing for a long-term deployment that may affect your ability to meet legal or financial commitments? Or are you nearing the end of your active duty service? If the answer to any of these questions is "yes," it’s particularly important that you understand your rights—and responsibilities—under the Servicemembers Civil Relief Act (SCRA).
Congress initially passed legislation at the start of World War II called the Soldiers' and Sailors' Civil Relief Act (SSCRA) to provide protection to those called to those in the armed forces. Enacted in 1940, the SSCRA was updated after the Gulf War in 1991 but was still largely unchanged as of 2003. The SCRA was written to clarify the language of the SSCRA, to incorporate decades of court interpretation of the SSCRA and to update the SSCRA to reflect new developments in American life since 1940. The SCRA, signed into law December 19, 2003, not only protects those on active duty; it also affords protection for Reservists and members of the National Guard (when activated under Title 10, United States Code). The current law is found at 50 U.S.C. App. § 501 et seq. Courts have generally construed the SSCRA liberally to protect those in uniform, and the same should be true with the SCRA. The U.S. Supreme Court has said that the statute should be read “with an eye friendly to those who dropped their affairs to answer their country's call.” Le Maistre v. Leffers, 333U.S.1, 6 (1948).
The primary purpose of the SCRA is to ease legal and financial burdens on military personnel and their families brought on by the demands of active duty. In the words of the Act, the provisions were designed to allow servicemembers to “devote their entire energy to the defense needs of the Nation.”
SCRA extends relief to all Army, Air Force, Coast Guard, Marine Corps, and Navy servicemembers on active duty, including reservists, members of the National Guard and Air National Guard who have been activated for duty, and active-service commissioned officers of the Public Health Service and National Oceanic and Atmospheric Administration. A number of SCRA provisions also extend to spouses and other dependents, such as protection against eviction and relief related to the termination of residential and motor vehicle leases.
Some of the more commonly invoked provisions include:
Six percent cap on interest rates. You can reduce or cap interest rates on any credit card, mortgage, or other loan you or your spouse obtained before you entered active duty to 6 percent per year for the period you remain on active duty. To take advantage of this reduced interest rate, you must establish that your active duty assignment materially affects your ability to pay the loan (for instance, if going on active duty requires that you take a substantial pay cut). These reduced rates do not apply to loans you obtained or new credit charges you made while on active duty. Nor do these rates apply to federal student loans.
Credit Rating Protection. Lenders cannot deny or revoke credit, change the terms of an existing loan, or refuse to grant credit because you sought SCRA protections. Any claim of rights under SCRA cannot be used as the basis for a lender to conclude that you are unable to pay a debt or to generate an adverse credit report. Furthermore, an insurer may not refuse to insure you based on any SCRA protections you may invoke.
Judicial Relief. If you are on active duty and it prevents you from attending a scheduled court appearance, SCRA allows you to request the postponement of civil court and civil administrative proceedings—including actions involving bankruptcy, divorce, or foreclosure—for at least 90 days. Note that this protection does not apply to criminal proceedings. In addition, if a court enters a default judgment against you because you failed to appear in court to defend a lawsuit or other action, you can request that the matter be re-opened and the default judgment set aside. The provisions that relate to judicial relief can be especially complicated, so be sure to consult with legal counsel at your nearest Armed Forces Legal Assistance Office regarding any civil court actions against you or you and your dependents.
Protection against evictions. If you rent your home or apartment and the rent does not exceed a certain amount (which, for 2009, is $2,932.31 per month), then your landlord cannot evict you or your dependents while you are serving on active duty without first obtaining a court order. In addition, you can request that the court delay the execution of an order to evict you or your dependents for 90 days—but, unlike the stay of other judicial proceedings, the court will have the ability to decide whether to postpone eviction and, if so, for how long. The rent threshold typically changes each year to reflect inflation and any rise in housing costs.
Ability to terminate property leases. You generally can get out of or terminate without penalty any residential and business property leases that began before your active-duty assignment. You also can terminate a lease you signed during active duty in the event of a change in your permanent duty station or if a new deployment will last more than 90 days. You must provide written notification of cancellation to your landlord—verbal notice is not enough.
Cancellation of automobile leases. You can terminate a car or truck lease if you are called to active duty for 180 days or more after signing the lease. You also can terminate the lease if you receive orders for a permanent change of duty station outside the U.S. or are being deployed with a military unit for 180 days or more.
Relief from foreclosures and forced sales. If you are on active-duty and it results in your inability to pay your mortgage or meet the terms of a purchase or installment contract, the SCRA may be able to help you. Real estate may not be foreclosed nor vehicles repossessed without a court order if you breach the terms of a purchase contract because of active military service. The servicemember may request a stay of such a proceeding under certain circumstances.
Termination and reinstatement of insurance. If your health insurance was canceled when on active duty , it can be reinstated without loss of benefits, waiting periods, or penalties in most instances. Life insurance also is protected against lapse, termination, and forfeiture for nonpayment of premiums or indebtedness for the period of military service plus two years. You also can cancel professional liability insurance and have that insurance reinstated. Deadlines for applying for reinstatement differ depending on the type of insurance. For instance, you have only 30 days after release from active duty to request reinstatement of professional liability insurance and receive SCRA protections, but 120 days to request reinstatement of health insurance benefits.
State Tax Relief. If you receive military orders that require you to move from your home state to another state, your “domicile” or state of legal residence for tax purposes does not change. SCRA prevents you from having to pay state taxes on your military income—or personal property, such as a car—to any state other than your home state of legal residency. For example, if your state of legal residence is Texas and the military sends you to Virginia, you won’t have to pay Virginia’s state income tax on your military earnings, nor will you have to pay personal property taxes to the state of Virginia. If you or your spouse earns non-military income, you may have to pay income taxes to the state where you’re stationed, if that state has an income tax. But the state cannot use your military earnings to increase either your tax liability or your spouse’s.
Difficult Landlord?
One of the most important provisions concerns a service member's right to legally cancel a lease when entering military service or receiving orders for a "permanent change of station or to deploy with a military unit, or as an individual in support of a military operation, for a period of not less than 90 days." (SCRA Section 535(b)(1).) Upon receiving notice of the activation or transfer orders, the landlord must consider the lease to be terminated 30 days after the rent is next due.
For example, if your rent is due on the first of the month, and you give the landlord notice of your activation or transfer on May 10, the lease is over on July 1, which is 30 days after the rent is next due (June 1).
The law says that if a service member terminates for one of the above reasons, any obligation of a co-tenant who is a dependent of that service member also terminates. (SCRA Section 535(a)(2).) The term "dependent" is defined much more broadly here than it is in tax situations. Under the SCRA, a dependent includes the service member's spouse, child, or even someone for whom the service member provided more than one-half of that person's support for 180 days preceding the service member's invocation of his or her rights under the SCRA. (SCRA Section 511(4).)Point your landlord toward this law and hope that he gets the message. You might mention that the Department of Justice has gotten rather active recently when it comes to tenant rights under the SCRA. In January in San Diego, Calif., and in March in Nebraska, the Department of Justice announced major settlements against large apartment firms that were systematically refusing to honor the lease termination rules of the SCRA. A quick read of those settlements, highlighted on the DOJ page linked above, ought to convince even the most stubborn landlord. If you still encounter resistance, follow the DOJ's instructions for contacting theArmed Forces Legal Assistance Program.
Contact information:
DefenseManpowerDataCenter[Attn: Military Verification]
1600 Wilson Blvd., Suite 400
Arlington,VA22209-2593
[Telephone 703-696-6762 or -5790/ fax 703-696-4156]
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