There are a variety of legal protections for active duty servicemembers outlined under the servicemembers civil relief act. They are relevant to civil judicial proceedings and financial transactions. The Department of Justice outlines six main benefits and protections including: the six percent interest rate cap, protections against default judgments, non-judicial foreclosures, installment contracts and repossessions, residential lease terminations, and enforcement of storage liens.
The six percent interest rate cap
The amount of interest to be charged on certain financial obligations incurred prior to military service may not exceed six percent per year. Car loans, mortgages, credit cards, and some other loans are covered by this provision. The creditor must forgive interest in excess of six percent per year. Mortgage interest rates also cannot exceed six percent during the period of service and one year after.
Protections against default judgments
A default judgment is a ruling granted by a court when one party has failed to perform a court-ordered action which has then prevented the issue from being presented before the court. If in a civil court proceeding, the defendant service member does not appear, the plaintiff must file an affidavit stating the defendant’s military service status.
If a defendant is a servicemember and has not made an appearance due to their military service, the court may not enter a default judgment against the defendant until an attorney has been appointed to represent the interests of the service member.
A non-judicial foreclosure allows a lender to foreclose property without getting a court order first. These foreclosures are only permitted in some jurisdictions and are not available for traditional mortgages.
During a period of active duty service and one year after, a creditor must get a court order in order to foreclose on a mortgage.
Installment contracts and repossessions
So long as a service member borrower made one installment payment on the contract or placed a deposit on the vehicle, it cannot be repossessed during the borrower’s period of military service.
Residential lease terminations
Active duty service members may terminate a lease if they receive permanent change of station orders, or deployment orders for a period of at least 90 days. The active duty service member must submit a written notice and copy of military orders, or a letter from the commanding officer to the landlord. Once this has been done, the lease will terminate 30 days after the following rent payment is due.
Enforcement of storage liens
During an active duty service members period of active duty and 90 days after, a person holding a lien on the property of said service member may not enforce it. This can include a storage facility or a tow company.
The Soldiers and Sailors Civil Relief Act
The soldiers and sailors civil relief act is the predecessor of the Servicemembers Civil Relief Act (SCRA). It was passed in 1940 and was later updated after the Gulf War in 1991 until it was replaced by SCRA in 2003.
Active duty refers to full-time members of the US military. These individuals can be deployed at any time. Aside from active duty, there are also reserve members, and members of the National Guard. The National Guard can also be covered by the SCRA, depending on who calls upon them and the length of the deployment.
Use the SCRACVS to verify military service
Landlords, property managers and motor vehicle lessors may not always know which of their clients are in the military and which are not. Regardless, military members are guaranteed SCRA protections. Therefore, it is imperative to check military status before beginning any legal action against your renter. The Servicemembers Civil Relief Act Centralized Verification service is the best place to verify military status.
Many lenders, banks, landlords, property managers and motor vehicle lessors use the SCRACVS to check the military status of their renters and customers. It is quick, easy, and cost effective — we even offer batch discounts for large-volume searches. Results are usually delivered within 24 hours. SCRACVS can also provide live customer support to answer your questions.
Stay safe and avoid fines and penalties for violating the SCRA by using the SCRACVS for all your military verifications.