The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Being deployed can be tough. And the U.S. government, even as far back as the Civil War, has recognized it’s hard to be focused on the mission at hand if you’re worried about what’s happening back at home. As a result, they have taken certain steps to help alleviate that worry for those who are on active duty.
The present Serviceman Civil Relief Act (SCRA) (found at 50 U.S.C. App §501-597b) says if you are part of the Army, Navy, Air Force, Marine Corps, or Coast Guard and you are on active duty; or if you are national guardsman or a reservist who has been called to active service for a period of more than 30 consecutive days; or if you are a commissioned officer of the Public Health Service or the National Oceanic and Atmospheric Administration, you are entitled to certain protections under the law while you are serving. These protections go into effect the day you leave civilian life if you are part of the regular Armed Forces, or when you receive mobilization orders, if you are part of the Reserves or National Guard. And many of them continue for 90 to 180 days after service is terminated.
These protections are not given just because of status in the armed forces, but also rest on the idea that duties abroad impact the ability of those serving to materially defend themselves against court actions back home. And while many of these rights can be waived that waiver has to occur either “during or after the service member’s period of military service.” Finally, most of these protections come into place.
While a full treatment of the entire act is beyond the scope of this post, a few of its protections especially stand out for those in active service.
Protection against Default Judgments
A default judgment can occur when one party files a court action against a second party, and the second party doesn’t show up to court to defend themselves. However, under the SCRA the Court isn’t allowed to hold it against you if you’re serving abroad and your commanding officer declines to let you fly back for a few days because you’re in the middle of doing something else like… you know, protecting freedom. So, the court can hold off on the proceedings for a minimum of 90 days, as long as you have some kind of meritorious defense, no matter how weak.
If a default judgment does show up while you’re on active duty, or within 60 days of termination, the case can possibly be reopened if you were materially affected in making a defense by your military service and you have a legal defense of some kind. In other words, if your abroad on orders and someone slaps you with a default judgment and you couldn’t come back because you were out in the middle of the Indian Ocean, or stuck in a firefight in Kandahar, and you have any kind of reason for why there shouldn’t be a judgment, you may want to talk to a lawyer, because that judgment may not belong on your credit report, or even be valid.
Stay of proceedings when service member has notice
Kind of like a judgment, except in this case it’s any civil proceeding. For example, your “ex” wants to change custody arrangements and figures you being abroad is a good time to make that happen. Did it happen while you were in the military, or is it within 90 days of termination or release? Yes? OK, did you receive notice of the proceeding? Yes? A letter explaining why you can’t show up along with a date when you can goes a long way. Next, a letter from your commanding officer stating you’re not allowed to go because you have military duties. Instant 90 day stay. And, if service continues to interfere with those pesky court dates you can apply for additional stays.
If you are under the effect of a stay, you can’t be penalized for not doing something you were obligated to do under a contract. And the court can choose to reduce or waive any fines or penalties if you were in military service at the time the fine or penalty was incurred and the obligation was materially affected by your service, like you were living in a tent in the middle of the desert on the other side of the world.
Statute of limitations
When someone wants to file a court case they have to look at the statute of limitations. Basically, it means that at a certain point what’s in the past is in the past, you’re no longer allowed to bring it up anymore.
When you’re deployed basically they can’t count it against you for the time you have to file a case in court. The exception is the Internal Revenue Service because they’re special.
Maximum rate of interest on debts incurred before military service
Can’t make your credit card payments? Enlist! Seriously though, there is a fixed limit on how much a service member, or an account that a service member holds jointly with their spouse, can be charged. That limit is 6%.
Sounds great right? But there is some fine print. That 6% limit only applies during military service and for one year after. If you get your orders, go out to celebrate that weekend and put $500 worth of drinks on you card, those drinks don’t fall under the 6% rate. (That’s why you should have let your buddy pick up the tab.) The 6% rate only applies to purchases before you enter the service, and you have to send the companies a written copy of your orders… maybe after the world quits spinning and the light stops trying to poke daggers into your brain.
The good news is this is actually retroactive back to the date that you were called into service, so the important thing is to get it in. However, if a creditor can show a court that you make enough that the rate should be higher than 6%, you may not get the rate. So keep that in mind.
Evictions
You know “that guy” who always had to find and exploit every loophole they could find in order to try and win whatever game was being played? When it comes to this rule, many landlords are “that guy.” Congress lays down a rule, and “that guy” looks for a loophole and exploits it until it collapses. So Congress changes the rules to plug the hole, and “that guy” goes looking for another hole.
“Except by court order, a landlord (or another person with paramount title) may not— evict a service member, or the dependents of a service member, during a period of military service of the service member, from premises— that are occupied or intended to be occupied primarily as a residence; and for which the monthly rent does not exceed [$3,217.81 as of 2014], or subject such premises to a distress during the period of military service.” Like most of the SCRA this assumes the lease was signed previous to enlistment or active duty (50 USC App § 531).
Pretty straight forward.
Protection under installment contracts for purchase or lease
Life is good. You’re stateside, good rotation, just leased yourself a new car, got the latest and greatest cell phone, then conflict breaks out in some obscure part of the world. Now you’re shipping out to someplace hot and muggy like the summer in Mississippi, except it’s nowhere near Mississippi. So, what are you going to do with that new car? And your cell phone contract?
If you just got in and will be active for at least 180 days without a break in service, or if they’re sending you from the continental U.S. to someplace outside the U.S. you may be able to break the lease on the car if you’re outside the continental U.S., or the lease on the place where you are living with a permanent change in station or deployment over 90 days, or break the lease on your phone if you’re going someplace where you won’t get service.
Once again, written notice is required.
Credit Reports
At the end of the day, there are certain protections that automatically kick in when you’re deployed. There are other protections that require you to provide notice. But you shouldn’t be penalized because you were willing to serve your country and if that problem is impacting your credit report, sign up for Lexington Law, we may be able to help.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.