Teach Me About Credit - Soldiers' and Sailors' Civil Relief Act

Soldiers' and Sailors' Civil Relief Act
- Protection For Our Heroes

How does the Soldiers’ and Sailors’ Civil Relief Act (SSCRA) protect me during active duty?
The SSCRA was established by Congress to provide a break from certain civil responsibilities for members of the military, reserve, and the National Guard.

The Act has been in place since the Civil War in one form or another. The creators’ intention was to allow active military to focus all attention on their military duty by providing financial relief. The Act can help beneficiaries save money and prevent legal action.

Benefits of the Act include:

A cap of 6% annual interest may be collected on all debts (credit card debt, mortgages, car loans, and other debts) incurred the prior to the commencement of active duty and also during the period of active military service.
Eviction protection for dependents, if the rent is $2,400 or less per month.
Delay of any civil court litigation or action (bankruptcy, foreclosure, and divorce proceedings). If notice of legal proceeding is received, you should contact the military unit or installation legal offices immediately.
A new provision allows a serviceman and his dependents to terminate an automobile lease, without penalty, if he is called to active duty for 180 days or longer.

A note on home mortgages:
It may be possible to make interest-only payments on your home mortgage while on active duty. U.S. lenders are encouraged by the Department of Housing and Urban Development to accept interest-only payments for active duty military until three months after their return.

How do I receive SSCRA benefits?
The interest rate reductions do not automatically occur — service members must request it. In order to receive these benefits, a letter must be sent to each of your creditors. Contact your unit or installation legal assistance office for the necessary paperwork. A sample letter is also provided here for your convenience.

There must be proof of mobilization/activation to active duty, evidence of the difference in the member’s military and civilian pay, creditor’s name, account number, and reference to the Soldiers’ and Sailors’ Civil Relief Act of 1940, 50 U.S.C. Appendix, Section 526.

Article Updated: 11/17/2004 11:51:34 AM