Relief act offers shield for families
Hello Military Community,
Every service member and spouse should know their rights under the Service Members Civil Relief Act, also known as Soldiers and Sailors Relief Act. As a military family, this is a legal right and protection that you should be aware of. Unfortunately, some people do and will try to take advantage of military families, knowing this law is in place to protect you. The SCRA covers all branches active duty, activated Guard and Reserve and their dependent family members. Remember, these laws were put in place to allow you, the service member to focus on the job and minimize undue financial hardship on the military family. Some of the highlights of the SCRA that you and your family should be familiar with are:
Limit on Interest Rates: Interest rates that the service member must pay on any loan or debt that they had prior to active duty are limited to no more than 6 percent a year. However, this cap on your interest rates is not automatic. You must contact your lender in writing and request this benefit change. They will require a copy of your service member’s orders and sometimes a copy of the Power of Attorney. Remember these are debts that include both spouses’ names and/or military members’ names alone but not debts that list only spouses’ names.
Some companies like SEARS and Military Star card will put your account on a deployment hold. This means you are not required to make payments on the account while your military member is deployed. This will not affect your credit rating negatively. These companies deserve praise for making this extra gesture. For some families this really helps! Speak to your creditors and you will be surprised at how many will go the extra mile.
Stay of Proceedings: If you are involved in a lawsuit you can request a delay, if the delay is necessary due to your service member’s service. For example, if the service member cannot show up for court. This does include child support cases and custody cases. This does not mean you stop paying child support.
Statute of Limitations: Your active-duty service member’s service to our country will not be taken into account when determining the statute of limitations on legal proceedings brought by or against you.
Health Insurance Reinstatement: If the service member has health insurance prior to reporting to active duty, SCRA requires your civilian health insurance company to reinstate coverage when the service member completes their service.
Home Foreclosure Protection: Your mortgage company along with dropping your interest rate to 6 percent, cannot foreclose on you if you have a mortgage prior to active duty and you can prove that military service is the reason you can’t afford to make your mortgage payment.
Business Lease Termination: Your service member can terminate a business lease (even one that has both your names on it) contract that you or your spouse had prior to active duty if reporting to duty would make continuing that lease unreasonable. That does not include walking away from back payments or abandoning the building the minute orders are issued. You will be responsible for ALL past payments through(in most cases) the end of the next month. You must give the lease holder/landlord written notice along with a copy of your orders and in some cases power of attorney paperwork if the spouse is cancelling on behalf of the service member. Remember this includes leasing cars and in some cases recently purchased cars.
Eliminates Double Taxation: If you or your service member work in one state but your legal residence is in a different state; SCRA prevents the state in which you’re employed from taxing your income. Only your state of residence may tax your income. (Hopefully your legal residence is one of the few states without state income tax). Remember the new ruling is that spouses no longer have to change residency every time they move. Make sure your tax accountant is aware of this when you are doing your taxes.
To find a legal assistance center near you visit legalassistance.law.af.mil/content/locator.php.
Also your JAG office can assist with some legal issues and may have this contact information at hand. You will find other organizations with pro bono legal assistance in my book. Best wishes from my family to yours.
If you have any questions or concerns or would like to share a story or situation, contact me at Kim@MilitaryResourceBooks.com and visit my website for updated information and other Resource not listed in my book.
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