09 Dec SCRA – How Does Servicemembers' Civil Relief Act Affect Debt Collectors, Service Member?
The Servicemembers’ Civil Relief Act (SCRA) is found at 50 USC app. Sections 501 and following sections. The purpose of the SCRA is to give servicemembers protection when they have been sued civillly. Judicial and Aministrative proceedings that adversely affect servicemembers are suspended temporarily so that the servicemember can concentrate on defense of the United States through their military service.
One good provision of the SCRA is that it caps interest at 6% when the servicemember’s ability to pay the debt (credit cards, loans, and even student loans) is materially affected by their military service. The interest cap lasts the length of service. Click here for more details.
There are three areas where the SCRA protects servicemembers in court actions: (1) against entry of default judgments; (2) stopping proceedings where the serviceperson has notice of the proceeding; and (3) stopping the execution of judgments, garnishments, attachments (and perhaps even getting the judgments done away with).
When a plaintiff tries to get a default judgment, the plaintiff must swear that the defendant is not a member of the military. If the motion/affidavit for default states that the person is in the military, the Court appoints an attorney or grants a “stay”(stopping) of the court action until the Court is satisfied that there is no good defense that the serviceperson might be able to raise.
If the serviceperson has notice of the proceeding and their military service is preventing them from participating in the litigation, the Court can “stay” the proceedings for up to 90 days (or more) if requested.
If a judgment, garnishment or attachment has issued, the Court may, if requested to by the serviceperson, issue an order “staying” the execution of the judgment, garnishment or attachment, if the ability to comply is materially affected by the serviceperson’s military service.
There are additional protections given under the SCRA — for example, being able to break a lease if transferred to a new base, avoiding contractual penalties if the military service caused a breach of contract, and those protections also extend in some cases to co-signers.
The SCRA also applies in bankruptcy cases and in adversarial proceedings in bankruptcy court.
Guess what? The debt collector calling your house is NOT going to inform you of the protections offered by the SCRA. If you are being harassed, contact your JAG officer or a private attorney who is experienced in fighting debt collection abuses immediately.
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