Soldiers’ and Sailors’ Civil Relief Act

If you have been overseas while in the military the SSCRA protects you during your time of duty.  The act protects military people and their families from foreclosures, evictions, repossessions, and debt collectors while away on duty.

Under the provisions of the Soldiers’ and Sailors’ Civil 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.

SSCRA and Credit Repair

The SSCRA contains specific provisions to assist our service members. Lenders will often be unaware of the service member’s status, and some will be unaware of the Act completely. If you are working with a service member, be sure that all creditors are made aware of the service member’s status, and the additional benefits afforded to them. Negative reporting can often be deleted once the creditors are made aware of the situation. This can be a useful protection for service members. Review the act in its entirety (pretty short) to see all of the benefits, along with the necessary procedures for implementation.

When does protection begin?

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 does not free the person from the debts. It just protects the person until they are finished with active duty.

Does the SSCRA protect your credit?

At this point, the SSCRA does not protect a consumer’s credit score or reporting of derogatory credit information. If the consumer is unable or does not make payments on their accounts, those derogatory items may be reported regardless of whether the person notified the creditor. The best protection is to have a family member or friend pay the bills while one’s gone.

Other protections

One protection is a 6 percent interest rate cap.  Service members should notify lenders of their intent to invoke the 6 percent cap in writing, along with proof of mobilization/activation to active duty and evidence of the difference in the member’s military and civilian pay. This could prevent creditors from attempting to challenge interest rate reduction requests in court.

The interest rate cap does not apply to federal guaranteed student loans. However, in the past the Department of Education has deferred or suspended payments on student loans for reserve component military members called to active duty. Service members should contact their lenders or schools to determine if such a program has been implemented and its eligibility requirements.

Another key provision under the SSCRA protects a service member’s dependents from being evicted while the service member is serving the country. If they rent a house or apartment that is occupied for dwelling purposes and the rent does not exceed $1,200 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.

In cases of eviction from dwelling quarters, courts may grant a stay of up to three months or enter any other “order as may be just” if military service materially affects the service member’s ability to pay the rent. This provision is not intended to allow military members to avoid paying rent, but rather to protect families when they cannot pay the rent because military service has affected their ability to do so.

Another significant protection under the act relates to civil proceedings. Service members involved in civil litigation can request a delay in proceedings if they can show their military responsibilities preclude their proper representation in court. This provision is most often invoked by service members who are on an extended deployment or stationed overseas.

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