The Servicemembers’ Civil Relief Act: A financial safety net for the troops

The brave men and women who wear our nation’s uniform answer the call of duty on a moment’s notice. It’s only fitting that there is legislation in place to protect them and their families from certain civil obligations—so they can give the full weight of their attention to defending our country!

A look at the Servicemembers Civil Relief Act

The Servicemembers Civil Relief Act (SCRA) was instituted to protect all active military families from foreclosures, evictions and other financial consequences of military service.

The law is intended to postpone or suspend certain obligations, such as:

• Outstanding credit card debt
• Mortgage payments
• Pending trials
• Taxes
• Terminations of lease

The law protects active-duty service members and their families from losing their cars or homes to repossession without a court order. It allows them to terminate certain contracts while on active duty and requires lenders to reduce interest rates on any loans to 6%. The Act also covers lapses in health and other insurance, as well as default judgments in court cases.

For general questions refer to the U.S. Department of Veterans Affairs.

Here’s a closer look at some of the more popular provisions of the law:

6% cap on interest rates

For those on active duty, this cap applies to credit cards, mortgages and private student loans. This provision begings from the first day of your active duty and covers the entirety of your service.

Eviction protection

If your family can’t make rent during your deployment, the government will provide up to $2,932.31 per month to help meet that obligation. The amount is adjusted annually to account for inflation.

In addition, if you are transferred to a new duty station, mortgage lenders are required to grant you permission for a short sale if you’re upside down on your home. In a similar manner, you can also terminate a housing leasing when you’re assigned to a new duty station.

Termination of motor vehicle leases

Those on active duty can terminate auto leases they signed before service and walk away no ham, no foul. Likewise, this provision applies if you’re relocated to a duty station outside the United States.

Have a lawsuit postponed

Civil suits you may be involved in while on active duty can be postponed through a stay of proceedings. However, this won’t work if the charges are criminal in nature.

For more information about this provision, contact your local AFLA (Armed Forces Legal Assistance) office or visit them online.