Service Members Civil Relief Act (SCRA)

 

Every military service member should know about this law. Older military personnel will know this law by its previous name, Soldier’s and Sailor’s Civil Relief Act (SSCRA).

The new SCRA was made effective on December 19, 2003 and it is found at 50 USC 501 – 596, Public Law 108-189.  This law is a complete revision of the SSCRA.  It clarifies the language of the SSCRA and it incorporates and codifies decades of SSCRA case law.

Purpose of the SCRA

The purpose of the SCRA is to strengthen and expedite the national defense through protection extended by this Act to service members of the United States to enable such persons to devote their entire energy to the defense needs of the Nation; and to provide for the temporary suspension of judicial and administrative proceedings and transactions that may adversely affect the civil rights of service members during their military service.

These U.S. Supreme Court cases, decided during and after World War II, set forth the legal understanding of this law.

1. Boone v. Lightner 319 U.S. 561, 575 (1943): “Protect those who have been obliged to drop their own affairs to take up the burdens of the nation.”
2. Le Maistre v. Leffers 333 U.S. 1, 6 (1948): “The Act should be read with an eye friendly to those who have dropped their affairs to answer their country’s call.”

Key Protections of the SCRA

1. Alters conventional contracts
2. Prevents default judgments except in accordance with its provisions
3. Allows for termination of residential and automobile leases
4. Reduces most pre-service debt to 6% interest rate
5. Anticipatory relief (instead of filing bankruptcy)
6. Private causes of action recognized
7. Criminal sanctions for Title III violations (same as SSCRA)
8. Mandatory 90 day-stay of proceedings (no longer discretionary as in SSCRA)

In simple terms, the real tangible benefits for service members are the allowance to break residential and automobile leases with proof of military orders, the reduction of interest rate on debt payments down to 6%, the suspension of any lawsuits against the service member and, very importantly, the ability to vacate a default judgment if one was entered against a service member while he or she is on active duty military orders.

Recently, the U.S. Department of Justice took action against a company that violated the SCRA.  The Justice Department announced that it had reached a $434,500 settlement with HSBC Finance Corp. over the repossession of cars owned by military service members. The settlement covers the repossessions of 75 cars that occurred between 2008 and 2010 and that federal officials say were done without the proper court orders. The deal resolves allegations that HSBC violated the Service Members Civil Relief Act, which is designed to safeguard the legal rights of people in the military and provides protection against auto repossessions. Under the law, judges are supposed to review and approve an auto repossession in instances when a service member took out a loan on a car and made a payment on it before entering military service. Judges can also delay the transaction or appoint a lawyer to represent the military service member. But the federal government says HSBC sidestepped the law by failing to obtain court orders before repossessing the cars. "Service members should never have to worry that they will lose their cars while they answer our nation's call to duty," Vanita Gupta, head of the Justice Department's Civil Rights Division, said in a statement.

I do recommend to our military service members that, if you are planning on utilizing this law, please do everything in writing to the affected party when you invoke this law on your behalf.  What I mean by that is to write detailed written correspondence that you send by certified mail, return receipt requested telling the affected party what portion of the law you are invoking and why you are able to do so.  Make sure to keep detailed notes and to keep a copy of everything you send and receive and all the proof of receipt of the documents as well.  That way, if you face an issue down the road, you will have easy proof to show that you instructed the affected party on the front end about your military status.

If you are a service member and you have questions about your rights under this law, please feel free to contact me to discuss your situation.  Thank you for your service.