The Servicemembers Civil Relief Act (SCRA) gives active-duty military personnel, reservists, and National Guard members who are called up to serve and receive a military paycheck the same protections as other servicemembers. You may have heard of the SCRA, but do you know what it does? This website provides a brief overview of the SCRA and advice on how to take advantage of it.
Things You Should Know With Servicemembers Civil Relief Act
1. What Does It Do?
The SCRA is a set of laws protecting military servicemembers during active duty. These protections include forbidding debt collectors from suing or repossessing a servicemember’s home or car simply because they are in the military. The law also prevents creditors from charging interest rates above 6 percent per year on eligible loans and provides other benefits such as rent control, mortgage payment protection, and insurance premium reductions.
2. How to Take Advantage of the SCRA
To take advantage of the SCRA, you must first be on active duty and receive (or expect to receive) military pay for your service. If you have been called to active duty, you can take the following steps to protect yourself. Make sure your creditor is aware of your military service. Have your creditor send you a letter that tells you what rights are available under the SCRA. You also may be able to file a claim against your landlord or another housing provider. Discuss any problems with an attorney before you take action against your creditor.
3. Who Can Benefit From the Act?
Any military member who receives periodic compensation (such as pay, retirement pay, drill pay, or basic allowance for housing) from the military can benefit from the SCRA. In addition, some people related to active-duty military servicemembers can also benefit from the SCRA. Spouses and dependents of active-duty servicemembers (including widows or widowers) can be eligible for benefits under the law.
4. Other Benefits
The SCRA also benefits people who are not in the military but have family members. When a servicemember receives a paycheck, his spouse and dependents can receive portions of his military pay for their use. In addition, active-duty servicemembers can transfer money from their military savings or retirement programs to their spouses.
5. Why Are the Protections in the SCRA Important?
The SCRA is a crucial piece of legislation that provides essential protections for military servicemembers. Servicemembers who take advantage of the protections available would be glad they did. Many servicemembers are surprised when they discover how difficult it is to get specific actions, such as a car loan, approved while on active duty. The SCRA provides protections that help keep you out of debt and may save you thousands of dollars in interest rates and late fees.
6. What is a Credible Threat If a Creditor Sues You?
The SCRA gives a servicemember the option of filing a “credible threat” against a creditor if the military is to suspend the servicemember’s pay. A credible threat is usually filed by someone who witnesses that the military has taken another action against that person but does not want you to get into similar problems. When you file such a claim, it prevents your creditors from going straight to court. In most cases, you do not have to pay your creditors after filing such a claim.
The SCRA is a valuable piece of legislation that can help keep servicemembers out of debt during their time on active duty. If a creditor is suing you, filing a credible threat under the SCRA may be essential in protecting yourself.
