Debt continues to be a common problem that we all experience at one point or another. Some just have a little more than others (or a lot more). Tackling that debt head-on can be an even more daunting endeavor as we try to provide our families with necessities, pay bills, and so on. However, if you’re an active member of the military, you’re eligible for something that can help with that debt — The Servicemembers Civil Relief Act.
The SCRA is something that we personally didn’t know about until my husband’s Army career was over. At that point, things were so hectic and crazy we completely missed the deadlines to activate it! To this date, I still regret it.
I don’t want the same for you. I WANT you to be able to save all of the money you can possibly get your hands on and to have a better financial plan for your family. plan for your family.
SCRA and How it Applies to Military Families
The Servicemembers Civil Relief Act (SCRA) is available to all branches of the military, including the National Guard and Reserves.
Basically, any active member of the military is eligible for the legal and financial protection that this act can offer. This can also extend to a service member’s spouse and/or children.
Access to The SCRA starts the day that your active duty orders are received and it doesn’t end until 30-90 days after discharge.
How SCRA Can Help
The Servicemembers Civil Relief Act provides numerous protections to military personnel and their families to ensure that the defense of our country is each member’s top priority. By decreasing the outside worries (like your debt), it allows you to have more focus and better perform your duties.
Small business and court proceedings
If for any reason, you find yourself on the defensive end of a civil action or administrative proceeding while having active duty orders, the court has to grant a delay of a minimum of 90 days. This also applies to child support and divorce proceedings.
The judge is also required to appoint a lawyer to represent you in your absence.
If you have debts or obligations associated with a small business that you own, the SCRA can protect your personal assets and service pay from creditors also.
SCRA foreclosure protection
As long as your mortgage was taken out before your active military status began, your home can only be foreclosed with a court order. However, this does not apply if you sign a waiver.
Through the court, the judge can decide to postpone the foreclosure and even offer ways to help your family, such as lowering payments or suspending payments. This foreclosure protection will stay in place for one year after your active duty ends.
Reduced interest rates
Are you plagued with loan and credit card debt that seems to be impatiently piling up due to high-interest rates?
If you answer yes, the good news is that as long as those debts are accrued before the start of your active duty — the SCRA can help.
Through this act, interest rates can be lowered to 6%, which can tremendously help to pay off debt. The Servicemembers Civil Relief Act can also help with some student loans and even mortgages. Just contact your lenders to apply for the SCRA and enjoy your reduced interest rates.
When the average credit card has an interest rate of 19.24% reducing it to 6% is a killer deal at helping you when you want to reduce costs, live more frugally or snowball that debt right off your plate.
You can usually find bank credit cards offering a 2% introduction interest rate. When the deal ends- it bounces up to a “normal” interest rate. If there is a balance on the card, the “hidden” interest earned during the introduction is now applied to your owed balance-giving you even more debt.
Had you paid off the card and gotten it to a zero balance before the promo was over, that “hidden interest” would have been removed.
Store credit cards are the WORST when it comes to interest rates. Usually, 20%+ per card! I’ve seen 26% at some of the stores that I frequent. That’s highway robbery!
When you apply for SCRA credit relief, you get rebated cash back
While it might take a few weeks from the point you send in the application to be approved and get your interest rates in place; it’s worth it!
Using the SCRA to reduce your interest rates not only makes it easier to pay off your debt from that point forward, but it also helps get you cashback.
This means that if you had a credit card for the past 3 years, but you’ve been in the Army for 2, all the “extra” interest you paid for the past 2 years may now be refunded back to you. This could easily clear your credit debt or put more money in your wallet.
You can also apply SCRA benefits to credit cards opened before your military career began, but you’ll only have it count from the moment you “legally” started the military (as shown in your orders).
Protections Regarding Deployment and Relocation
In the event of deployment or relocation, the SCRA can help your military family transition smoothly with terminations ranging from residential leases to cutting your phone services. This applies to the military member and any dependents allowing you to negate any early termination fees.
Residential lease –
New orders can be a stressful time for military families — especially when they involve moving and fees for early termination leases.
The Servicemembers Civil Relief Act lease termination is a simple and straightforward process.
The SCRA allows you to simply provide a written notice to the landlord of your request to terminate the lease with a copy of the new orders of deployment or relocation.
By sending the appropriate paperwork this allows for the lease to be terminated — as if the lease has run its natural course — rather than considered early termination.
The termination will be effective 30 days after the first date rent is due after your letter to terminate has been received. However, you will still be held accountable for any damages beyond the normal range of wear and tear.
Cell phone service –
If you are sent orders to relocate or deploy for more than 90 days, you can request termination of your cell phone service. Further, if you’re being deployed outside of the United States, your mobile carrier must let you suspend your service — at no cost — until the end of your deployment.
They cannot extend your contract during this time. This protects military families from early termination fees and reactivation fees. Do keep in mind that this protection only extends to those contracts in which were signed before new orders were received.
Auto lease –
As long as you signed your automobile lease before your active duty started, you can write to that company with a copy of your orders — and in some cases an odometer reporting — and terminate your lease.
A few things to note:
- You have to give a copy of your orders
- You have to return the vehicle within 15 days
- And you have to have the vehicle paid and up to date at the time of termination
You must either hand-deliver the termination or send via US Mail/private courier. The automobile must be returned within 15 days of the company receiving your termination letter, and all amounts are required to be paid up to the date of termination.
Once the company has received your letter — and the vehicle — the lease is terminated.
It is then the company’s responsibility to refund any advance payments that were made within 30 days of the lease being terminated. A company also cannot repossess your car or terminate a lease — on their own — without having a court order to do so.
Remove Debt Today!
The above listed are only a fraction of what the Servicemembers Civil Relief Act can offer you and your family. If you are unsure if any of these protections apply to your situation, feel free to contact the companies or lenders in which your debt resides.
Speaking to a financial advisor can also be helpful in organizing debt and locating which debt can be helped through the SCRA.
If you need help obtaining your active duty status you can also visit the SCRA website to submit multiple or single requests for your Title 10 active duty status.
This will help you to learn which legal and financial protections are available to you.
Thank you for your service and sacrifice to ensure the safety of our country for generations to come.
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