Consumer Protection for Veterans

7 Ways to Stop Debt Collection Scammers

Some debt collectors can be ruthless, calling all hours of the day and night, and threatening arrest and violence if they don’t get paid.  Speaking in heavily accented English, they may use foul language, and they don’t hesitate to lie about who they are, where they are calling from, or what they will do to you if you don’t pay up right away.  Click here for the full article from

Military Consumer Protection Day

Military Consumer Protection Day (MCPD) is a joint initiative to empower active duty and retired servicemembers, military families, veterans and civilians in the military community.  Use these free resources as the first line of defense against fraud and make better-informed decisions when managing your money.

What is the SCRA?

The Servicemember's Civil Relief Act (SCRA) is a revision of the Soldiers' and Sailors' Civil Relief Act (SSCRA) of 1940.  The SCRA provides a wide range of protections for active duty servicemembers.  It is intended to postpone or suspend certain civil obligations to enable service members to devote full attention to duty and relieve stress on the family members of those deployed servicemembers.  A few examples of such obligations you may be protected against are:

  • Outstanding credit card debt
  • Mortgage payments
  • Pending trials
  • Taxes
  • Termination of leases.

* Civil obligations must be prior to enlistment or prior to being ordered to active duty for SCRA protections to apply.

Who exactly is protected by the SCRA?

The SCRA Protects:

  • All Reserve personnel (Army, Navy, Marine Corps, Air Force, and Coast Guard) when on active duty. 
  • All full-time active duty personnel from all branches of the Armed Forces and commissioned officers of the Public Health Service or the National Oceanic and Atmospheric Administration while on active service.
  • Members of the Army National Guard and the Air National Guard only when they are called to active duty by the President or Secretary of Defense for more than 30 days in response to a national emergency.
  • Servicemembers’ dependents (spouse, children, and other individuals for whom the servicemember provided at least 50% support for 180 days before applying for relief under the Act).

Are there limits to when the SCRA applies to a servicemember?

Yes.  Although there are many protections for servicemembers available under the act, there are some instances where the servicemember must first be able to affirm that his or her ability to fulfill a legal responsibility (for example, making the payments on your mortgage), has been "materially affected by the military service” before the SCRA protections are available. 

Does the SCRA apply to criminal cases?

No.  The SCRA does not apply to criminal cases, only civil cases.  Examples of civil cases, which also involve the SCRA, include suits dealing with creditors, landlord-tenant disputes, and family law cases, such as divorce, child custody, and support proceedings.  The SCRA also applies to federal matters civil proceedings, such as bankruptcy. 

What can you qualify for under the SCRA?

  • Reduced interests rate on mortgage payments.
  • Reduced interests rate on credit card debt.
  • Protection from eviction if your rent is $2,958.53 per month or less
  • Delay of all civil court actions, such as bankruptcy, foreclosure, or divorce proceedings
  • Early termination of a car or housing lease without penalty. 

What kinds of protection does the SCRA provide?

  • Stays
    • Upon servicemember’s request, court must stay proceedings for at least 90 days
    • Court may grant additional stays; if court declines to do so, it must appoint counsel
  • Default Judgments
    • Plaintiff must file affidavit stating whether or not Defendant is in military service (or that Plaintiff is unable to make such a determination)
    • Where it appears Defendant is in military service and has not entered an appearance, court must:
      • Stay proceedings for at least 90 days if court determines there may be a defense that cannot be presented without Defendant’s presence, or if Defendant’s counsel has been unable to determine whether a defense exists
      • Appoint counsel before entering judgment
    • If court enters default judgment during military service or within 60 days after termination of or release from military service, servicemember may ask for the judgment to be set aside
    • To have judgment set aside, servicemember must:
      • Apply for relief within 90 days of termination of or release from military service
      • Show that military service materially affected ability to present meritorious defense
  • Interest Rate Cap
    • Debts incurred prior to military service capped at 6% interest during period of military service
      • State laws may provide additional protection – ex.  In Ohio, cap applies to all debts regardless of when incurred
      • Extends for one year after period of military service for mortgages
    • Interest incurred in excess of cap shall be forgiven and servicemember does not owe any deficiency resulting from the interest reduction, nor should the creditor issue an IRS Form 1099 reflecting cancelled debt income
    • Not automatic – servicemember must provide creditor written notice within 180 days from end of military service; creditor must apply reduction retroactively
  • Foreclosure
    • Applies to matters involving rent, installment contracts, mortgages, liens, assignment, and leases
    • Applies to servicemembers and their dependents
      • Servicemembers’ protections are automatic
      • Dependents must apply for protections
    • Property must be owned by servicemember or dependent before active duty
    • Foreclosure action must have been filed during, or within nine months after, active duty
      • Nine months’ extension applies through December 31, 2014; will return to original 90 days after that
    • Foreclosure, sale, or seizure of property for breach of mortgage obligation during prescribed period is invalid unless pursuant to court order or servicemembers’ written waiver
    • Court may after a hearing and on its own motion, and shall upon application by servicemember, when military service materially affects servicemembers’ obligations:
      • Stay proceedings for as long as justice and equity require
      • Adjust obligation to preserve interests of all parties

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