Soldiers and Sailors Relief Act

Under the provisions of the Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA), you may qualify for any or all of the following:

• Reduced interest rate on mortgage payments.
• Reduced interest rate on credit card debt.
• Protection from eviction if your rent is $1,200 or less.
• Delay of all civil court actions, such as bankruptcy, foreclosure or divorce proceedings.

The SSCRA covers all Active Duty service members. Reservists and the members of the National Guard are also protected under the SSCRA while on active duty. The protection begins on the date of entering active duty and generally terminates within 30 to 90 days after the date of discharge from active duty.

Reduced Interest Rates

One of the most significant provisions under the act limits the amount of interest that may be collected on debts of persons in military service to 6 percent per year during the period of military service. This provision applies to all debts incurred prior to the commencement of active duty and includes interest on credit card debt, mortgages, car loans and other debts. The provision applies to pre-service debts, and the interest rate reduction doesn't occur automatically — service members must request it.

Once a service member requests the rate reduction, the creditor must either comply or apply for court relief. The SSCRA puts the burden on the creditor to show that military service has not "materially affected" a member's ability to repay the debt. The court generally grants relief if the creditor can make his case.

You need to talk to a Legal Assistance Attorney to ensure you are eligible. You may be eligible if you and your loan meet the following conditions:

Eviction Protection

Another key provision under the SSCRA protects your dependents from being evicted while you are serving your country. If you rent a house or apartment that is occupied for dwelling purposes and the rent does not exceed $1,200 per month, the landlord must obtain a court order authorizing eviction. This provision applies regardless of whether quarters were rented before or after entry into military service.

In cases of eviction from dwelling quarters, courts may grant a stay of up to three months or enter any other "order as may be just" if military service materially affects the service member's ability to pay the rent. This provision is not intended to allow military members to avoid paying rent but rather to protect families when they cannot pay the rent because military service has affected their ability to do so.

Delay of Civil Proceedings

Another significant protection under the act relates to civil proceedings. Service members involved in civil litigation can request a delay in proceedings if they can show their military responsibilities preclude their proper representation in court. This provision is most often invoked by service members who are on an extended deployment or stationed overseas. A service member should contact the unit or installation legal office immediately if they receive notice of court proceedings against them.

State Taxes

If your home state taxes military pay, you will have to pay those taxes. If you get assigned to another state, you will still legally be a "domiciliary" of your home state. The state to which the military assigns you cannot tax your military pay. If you moonlight, they can tax that pay - just your military pay is exempt.

Health Insurance

A person called to active duty is entitled to reinstatement of any health insurance that was in effect on the day before such service commenced, and was terminated effective on a date during the period of such service.

For general topics related to Credit & Credit Reports,
go to the Credit Page under the Debt Mgt Menu