Servicemembers Civil Relief Act: What You Need to Know

Military service personnel can have their lives disrupted in ways civilians rarely face. Service members face deployment or being relocated with little notice, which could create financial and legal hardships for themselves and their families.

The Servicemembers Civil Relief Act (SCRA) protects them from facing suffering such consequences while performing military duties.

In 1940, not long before the United States entered World War II, Congress passed the Soldiers’ and Sailors’ Civil Relief Act to protect those called to military service. The SSCRA was updated after the Gulf War in 1991 and again in 2003 to reflect changes in American life.

Who Is Covered by the SCRA?

All active-duty members of the Army, Navy, Air Force, Marine Corps, Coast Guard and Space Force are covered under the SCRA. Members of the Reserves and National Guard called to active duty under Title 10 orders (typically issued for national defense reasons) are covered and National Guard members mobilized under Title 32 federal orders (typically for disaster relief or homeland security assignments) for more than 30 days are covered. Also, active-duty commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration receive SCRA protection. Those who hold power of attorney for these service members are covered, and dependents for whom the service member provided more than half the financial support for the past 180 days may be eligible for specific protections like housing, taxes, and contract terminations.

In addition to the SCRA, other federal and state laws protect military personnel and their families.

The Military Lending Act protects active-duty service members, their spouses, and dependents from predatory lending, including a 36% cap for most credit products and a prohibition on mandatory arbitration clauses. (MLA protections cover credit extended while the service member is serving on active duty; SCRA protections cover obligations incurred before entering active duty.)

The Military Spouses Residency Relief Act permits military spouses to retain their home state of residency for tax purposes when relocating to a new state due to military orders and permits them to choose the same state of residence as the service member.

Many states have enacted laws that expand upon federal protections, particularly for National Guard members on state active duty, who may not be covered by the SCRA.

Key Protections and Benefits Under the SCRA

Because national defense considerations can require service members to be relocated suddenly and permanently, the SCRA protects them from financial and legal hardships so they can concentrate on their military duties. Specific provisions include interest rate reductions on debts taken out before entering active duty; protections against foreclosure, repossession, and eviction; and protection against default judgments in court because your active-duty assignments prevent you from appearing in court.

Interest Rate Reduction on Pre-Service Debt

Many who join the military do so already owing money – like mortgages, vehicle loans, student loans, home equity loans, credit card debt – and under the SCRA, the interest rate on loans that were taken out before entering active duty can be lowered to 6%. That applies whether you took out the loans by yourself or with a spouse. Creditors can challenge this if they believe your military service doesn’t affect your ability to pay a rate higher than 6%.

To receive these benefits, you must notify your lenders in writing, including a copy of your orders to active-duty service or a letter from you commanding officer showing the date you entered active duty. This request must be made while you are on active duty or up to 180 days after being released from active duty.

For most loans, the rate reduction is applied throughout your active-duty service, and for mortgages, it lasts for an extra year after that service ends.

SCRA requires lenders to forgive interest (including additional fees and charges) greater than 6% per year, and that forgiveness is retroactive to the first date you were eligible. Any excess interest you paid must be refunded.

Protections Against Foreclosure, Repossession, & Eviction

SCRA protections greatly affect whether a service member’s home can be foreclosed, vehicles or other property can be repossessed or whether an active military member can be evicted by a landlord.

Mortgage Foreclosure Protection

If a service member gets a mortgage before entering active duty, a foreclosure on that property can’t take place within nine months after your service on active duty without a court order. This is the case even in states that allow foreclosures to take place without involving the courts. Under SCRA, a judge can pause or block a foreclosure or order the creditor to adjust the loan. The protections extend to default judgments, so service members are protected even if they don’t appear in court.

Auto or Property Repossession Protection

Lenders cannot repossess vehicles or property without first getting a court order, which means the lender must first file a lawsuit. These protections apply if you got the loan or lease before entering active-duty service and made a deposit or installment before entering service and if your military service affects your ability to make payments. Lenders can, however, charge late fees, report missed or late payments to credit reporting agencies and try to collect the debt.

Eviction/Housing Protections

Service members may be able to avoid or delay eviction, especially if the lease began before they entered active duty or the lease was signed before the service member received a permanent change of station (PCS) or orders to deploy for 90 days or more. Landlords will need a court order to evict, even if the terms of the lease allow for eviction. Courts can delay evictions for 90 days or more if military service materially affects the person’s ability to pay. These protections extend to the service member’s dependents.

Lease Termination Rights

Service members have the right to end a residential or auto lease with no penalty if it was signed before they entered active duty or before a permanent change of station or deployment orders.

To do so, send your landlord or leasing agent a written notice of lease termination, including a copy or your orders or a letter from your commanding officer. Hand-deliver the documents, use a private carrier or by mail with a return receipt requested.

Protection from Default Judgments in Civil Court

Default judgments happen when someone is sued and fails to appear in court to explain their side of the dispute. Under the SCRA, the court must appoint an attorney to represent a service member before entering a default judgment. Typically, the attorney can pause the case for 90 days or longer to allow the service member to come to court after his or her duty ends.

The party bringing the lawsuit must file an affidavit indicating whether the defendant is on active duty or if the defendant’s status is unknown.

Responsibilities & Process for Service Members

SCRA protections are extensive, but they require action on the service member’s part. You’ll need to notify those to whom you have financial or legal obligations how your involvement in the armed forces is affecting your ability to follow earlier agreements, and these notices must come within certain time periods and with appropriate documentation.

Invoke SCRA Protections

Taking advantage of Servicemembers Civil Relief Act (SCRA) protections like the 6% interest rate cap or lease termination requires notifying the creditor or landlord in writing and providing a copy of active-duty orders or a letter from your commander.

Timing considerations

Timing considerations depend on the type of SCRA benefit you seek. For interest rate reduction, you must make the request while on active duty or within 180 days after your release. Residential leases can be terminated if the service member receives orders for a permanent change of station or deployment for 90 days or more; auto leases can be terminated on deployment orders of 180 days or more or PCS orders outside the continental United States. Mortgage foreclosure protection extends for nine months after active duty. Getting relief from state income tax can be applied for during active service or up to 180 days afterward.

Documentation

In most cases, to obtain SCRA protections, you must request it in writing to the creditor or landlord and provide either a copy of your active duty/deployment/PCS orders or a letter from your commanding officer explaining why you qualify. If your case involves joint debts with your spouse, you may need to provide a marriage license or certificate.

What the SCRA Does Not Do

The SCRA has limits. It doesn’t handle every debt, requires action by the service member to take advantage of its protections, and the type of duty you’re assigned affects its provisions.

It doesn’t cover debts incurred after you begin military service, doesn’t halt criminal proceedings and doesn’t extend to military retirees or reservists not on active duty.

It doesn’t eliminate debts you incurred before joining the military but limits how much interest you can be charged for pre-military debts. The SCRA can’t help you with business debts, only personal, family or property debts. Also, creditors can take collection or foreclosure actions if they can prove your military service does not materially affect your ability to pay.

Limitations and Common Misconceptions

The SCRA mostly applies to obligations like debts and leases that were incurred before the person entered active duty. It doesn’t cancel these obligations but only modifies the terms or suspends some penalties.

It doesn’t extend to military retirees or reservists not on active duty.

It doesn’t halt criminal proceedings.

Courts or lenders don’t automatically apply SCRA provisions; service members must request or apply for protection.

Enforcement & How to Seek Help if Rights Are Violated

The U.S. Department of Justice is responsible for enforcing the SCRA and files lawsuits against those who violate these rights. The DOJ can secure monetary damages and civil penalties for service members. Likewise, the Consumer Financial Protection Bureau Accepts complaints about finance companies, banks and lenders and refers them to the DOJ for investigation. State attorneys general also may enforce SCRA violations.

A military legal assistance attorney can also help service members assert SCRA rights at no cost.

To contact SCRA directly, you can visit its website or the Defense Manpower Data Center.

Recent Updates to the SCRA

The SCRA now gives service members and their spouses the following options to determine state residency for income tax purposes:

• The service member’s residence or domicile
• The spouse’s residence or domicile
• The service member’s permanent duty station.

Before 2023, state residency was determined by the service member’s duty station. The 2023 amendments also allow members and their spouses with active professional licenses to transfer those licenses to their new jurisdiction if they provide a copy of their military orders to the licensing authority in the new jurisdiction, are in good standing in the old jurisdiction and have actively used the license in the last two years.

Practical Advice & Tips for Service Members and Families

The documents you’re most likely to need to seek SCRA protections include copies of orders calling you to active duty and mobilization or deployment orders; a letter on official letterhead from your commanding officer confirming active-duty status and dates; leave and earning statements showing active-duty status and income; and marriage certificate if your spouse is requesting benefits. Create a physical or digital folder of these documents and keep them for at least 180 days after your active-duty ends.

To request benefits, send a written request to your creditor, bank or landlord invoking SCRA protections, including a copy of your orders. Military OneSource can provide legal assistance for drafting these requests. Hand-deliver the documents, use a private carrier or by mail with a return receipt requested.

Interest rate reduction requests must be made while on active duty or within 180 days after your release. Mortgage foreclosure protection extends for nine months after active duty. Getting relief from state income tax can be applied for during active service or up to 180 days afterward.

The SCRA Can Help Keep You Financially Healthy During Deployment

The SCRA was crafted to help service personnel focus on their military duty without financial or legal stress brought on by the demands of military life. But it doesn’t work without service members knowing their rights and taking the proper steps to invoke these federal protections.

It’s important to understand and use SCRA benefits when applicable, and if you qualify, don’t delay. The earlier you apply, the sooner you can receive the relief SCRA was designed to deliver.