Congress enacted the Servicemembers Civil Relief Act (SCRA) in 2003 in response to the increased deployment of Reserve and National Guard military and as a modernization and restatement of the protections and rights previously available to servicemembers under the SSCRA. The SCRA has been amended since its initial passage, and Congress continues to consider amendments from time to time. Congress has long recognized the need for protective legislation for servicemembers whose service to the nation compromises their ability to meet obligations and protect their legal interests. The SCRA is an exercise of Congress's power to raise and support armies and to declare war. The purpose of the act is to provide for, strengthen, and expedite the national defense by protecting servicemembers, enabling them to "devote their entire energy to the defense needs of the Nation." The SCRA protects servicemembers by temporarily suspending certain judicial and administrative proceedings and transactions that may adversely affect their legal rights during military service. The SCRA does not provide forgiveness of all debts or the extinguishment of contractual obligations on behalf of active-duty servicemembers, nor grant absolute immunity from civil lawsuits. Instead, the SCRA provides for the suspension of claims and protection from default judgments against servicemembers. In this way, it seeks to balance the interests of servicemembers and their creditors, spreading the burden of national military service to a broader portion of the citizenry. Courts are to construe the SCRA liberally in favor of servicemembers, but retain discretion to deny relief in certain cases. Many of the SCRA provisions are especially beneficial for Reservists activated to respond to a national crisis, but some provisions are also useful for career military personnel. One measure that affects many who are called to active duty is the cap on interest at an annual rate of 6% on debts incurred prior to a person's entry into active-duty military service. Other measures protect military families from being evicted from rental or mortgaged property ; from cancellation of life insurance ; from taxation in multiple jurisdictions ; from foreclosure of property to pay taxes that are due ; and from losing certain rights to public land. Military authorities are required to provide servicemembers with written information describing their rights and benefits under the SCRA. The SCRA protects servicemembers from any penalty imposed solely due to their invocation of rights. The SCRA provides that no stay, postponement, or suspension of any tax, fine, penalty, insurance premium, or other civil obligation or liability applied for, or received by, a person in military service can be the sole basis for any of the following:
1. a determination by a lender (or other person) that the servicemember is unable to pay the civil obligation or liability; 2. a decision by a creditor to deny or to revoke credit; to change the terms of an existing credit arrangement; or to refuse to grant credit in substantially the amount, or on substantially the terms, requested; 3. an adverse creditworthiness report by, or to, a consumer credit information enterprise; 4. an insurer's refusal to sell insurance coverage; 5. an annotation by the creditor or a credit reporting agency to reference the servicemember's reserve or National Guard military status on her credit report; or 6. a change in the terms offered or conditions required for issuance of insurance. A servicemember may initiate an action for relief prior to defaulting on any pre-service obligation or liability, including tax obligations, rather than waiting for the creditor to commence proceedings. This section authorizes the U.S. Attorney General to commence a civil action in U.S. district court for violations of the SCRA by a person who (1) engages in a pattern or practice of violating the act; or (2) engages in a violation that raises an issue of significant public importance.
Congress enacted the Servicemembers Civil Relief Act (SCRA) in 2003 in response to the increased deployment of Reserve and National Guard military and as a modernization and restatement of the protections and rights previously available to servicemembers under the Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA). The SCRA has been amended since its initial passage, and Congress continues to consider amendments from time to time.
Congress has long recognized the need for protective legislation for servicemembers whose service to the nation compromises their ability to meet obligations and protect their legal interests. The SCRA is an exercise of Congress's power to raise and support armies and to declare war. The purpose of the act is to provide for, strengthen, and expedite the national defense by protecting servicemembers, enabling them to "devote their entire energy to the defense needs of the Nation." The SCRA protects servicemembers by temporarily suspending certain judicial and administrative proceedings and transactions that may adversely affect their legal rights during military service. The SCRA does not provide forgiveness of all debts or the extinguishment of contractual obligations on behalf of active-duty servicemembers, nor does it grant absolute immunity from civil lawsuits. Instead, the SCRA provides for the suspension of claims and protection from default judgments against servicemembers. In this way, it seeks to balance the interests of servicemembers and their creditors, spreading the burden of national military service to a broader portion of the citizenry. Some protections are contingent on whether military service materially affects the servicemember's ability to meet obligations, while others are not. Courts are to construe the SCRA liberally in favor of servicemembers, but retain discretion to deny relief in certain cases. The Services are required to provide information to servicemembers explaining their rights under the SCRA.
Many of the SCRA provisions are especially beneficial for Reservists activated to respond to a national crisis, but many provisions are also useful for career military personnel. One measure that affects many who are called to active duty is the cap on interest at an annual rate of 6% on debts incurred prior to a person's entry into active-duty military service. Creditors are required to forgive the excess interest and are prohibited from retaliating against servicemembers who invoke the 6% interest cap by submitting adverse credit reports solely on that basis. Other measures protect military families from being evicted from rental or mortgaged property; from cancellation of life insurance and professional liability insurance; from taxation in multiple jurisdictions; from losing domicile for voting and other purposes due to being stationed elsewhere; from losing child custody due to deployment or the possibility of deployment; from foreclosure of property to pay taxes that are due; and from losing certain rights to public land.
The SCRA makes it unlawful for lienholders or lessors to foreclose or seize property owned or used by servicemembers without a court order. It also permits servicemembers to prematurely terminate leases and other term contracts without incurring any early termination penalties. Statutes of limitations that might otherwise prevent servicemembers from pursuing remedies in court or before any governmental agency, including state and local entities, are tolled for the duration of the servicemember's military service. Servicemembers may initiate an action in court for relief prior to defaulting on any pre-service obligation or liability, in order to obtain restructuring of loan repayments or other equitable relief without incurring any penalty. Servicemembers may bring an action in court to enforce their rights under the SCRA, or the Attorney General may bring a civil action in U.S. district court for violations of the SCRA by a person who (1) engages in a pattern or practice of violating the act; or (2) engages in a violation that raises an issue of significant public importance.