In the Armed Services? The Servicemembers Civil Relief Act May Help You Avoid Bankruptcy! (Part Three of Four)
By Kevin Gipson, New Orleans Bankruptcy Attorney on Mar 26, 2007 in General Bankruptcy Information, Louisiana, Personal Finance
In Part Two we discussed how the Servicemembers Civil Relief Act (SCRA) can stay court and administrative proceedings brought by creditors.
In this part, we will discuss how the SCRA can help you by lowering interest rates.
The SCRA requires that interest on pre service loans is capped at 6%.
However, in order to get the reduction to 6% the service member must request the reduction in writing and include a copy of his orders.
A creditor may challenge the rate reduction, but to do so the creditor must show that the service will not have a material impact on the service member’s ability to pay.
Once a creditor receives notice, it must reduce the interest rate from the date that the service member is placed on active duty.
In the final part of this series, we will discuss the relief available under the SCRA for contracts of lease.
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