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SCRA QuickSeries® Booklet

Servicemembers Civil Relief Act

The Servicemembers Civil Relief Act (SCRA) helps those who have dropped their affairs to answer their nation's call and alleviates some of the stress placed on their families. It allows Servicemembers to suspend or postpone certain civil obligations so they can devote their full attention to their military duties.

What Kind of Relief Does it Provide?

SCRA benefits include the following:

  • Caps on interest rates
  • Tax reliefs
  • Temporary relief from mortgage payments
  • Termination of residential and automobile leases
  • Protection from eviction
  • Stay of judicial proceedings

Who Does it Protect?

The SCRA offers protection to the following:

  • Active duty Servicemembers in the Army, Air Force, Coast Guard, Marine Corps or Navy
  • Reservists in active federal Service
  • National Guard members in active federal Service
  • Dependents of Servicemembers in active duty (some benefits only)

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RIGHTS AND BENEFITS

The SCRA provides eligible Servicemembers with a variety of rights and benefits, including (but not limited to) the ones listed in this section. For more information, contact your local Armed Forces Legal Assistance (AFLA) office.

A 6% Cap on Interest Rates

If the Service affects your ability to meet obligations you had before entering active duty, you can cap their interest rate at 6%:

  • The interest rate cap starts on the first day of active duty and lasts for the duration of Service.
  • The cap can apply to credit cards, mortgages and student loans (excluding Federal Guaranteed Student Loans).
  • The excess interest will not be due after your release from active duty. The portion above 6% is permanently settled.
  • Your monthly payment must be reduced by the amount of interest saved during the covered period.

To qualify for the 6% cap, you must demonstrate the following:

  • You are now on active duty.
  • The obligation or debt was made prior to entering active duty.
  • Military Service significantly affects your ability to make payments.

You must provide creditors with a written notice requesting relief under the SCRA and a copy of your orders within 180 days of release from Service.

Protection from Eviction

The SCRA protects Servicemembers and their families from eviction if they lease a house or apartment and cannot make rent. It is adapted to today's high cost of living. Currently, housing leases are covered for up to $2,932.31 per month and this amount will be adjusted each year to cover inflation.

You also have the right to terminate a housing lease when you receive Permanent Change of Station (PCS) orders or when you are deployed to a new location for 90 days or more. To qualify, you or your dependents must occupy the house.

The SCRA ensures the following:

  • Your landlord cannot evict you or your dependents while you are serving on active duty without first obtaining a court order.
  • You can request that the court delay an eviction order's execution* for 90 days. However, the court can decide whether to postpone eviction and for how long.
  • You can be protected from eviction for about three months. You must show that military duty significantly affects your ability to pay rent.
  • If a landlord evicts you regardless or tries, he or she may be subject to fines or even imprisonment. If you are in this situation, consult an AFLA attorney.

*Flip to the "Glossary" tab for a definition of words in italics.

Tax Relief

If you have received PCS orders relocating you to another state, only your permanent legal residence is considered for tax purposes. As such, if you are not a resident, the state where you are temporarily located cannot tax your military income or use it to increase your or your spouse's tax liability.

The SCRA can also defer the collection of income tax due before or during active duty Service:

  • The deferral ends 180 days after your release.
  • No interest or penalty is accrued during this period.
  • The deferral does not apply to Federal Social Security or Medicare taxes.

To qualify for the deferral, you must notify the Internal Revenue Service (IRS) or state tax authority and demonstrate the following:

  • You are now on active duty.
  • Military Service significantly affects your ability to make payments.

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SCRA JUDICIAL PROCEEDINGS

Stay of Proceedings

If you have been called to active duty and you are served with a legal complaint, you can obtain an automatic stay of proceedings to either stop the action or postpone some phase of it. You must request SCRA protection in writing and demonstrate that military duty is preventing you from appearing in court.

A stay of proceedings lasts at least 90 days and can be obtained at any stage. Any additional delay is at the court's discretion. Keep in mind that you can only halt proceedings for a reasonable amount of time. For example, if you are sued for divorce, you can postpone the hearing, but not indefinitely.

A stay can be granted for administrative proceedings. However, SCRA protection does not apply to criminal cases. Before requesting a stay of proceedings, consult an AFLA attorney to learn the strict statutory requirements.

Stay of Execution

If your military duty prevents you from complying with a court order, you may request a stay of execution. The action brought against you must have commenced before or during Service or within 90 days of your release.

Statute of Limitations

Your period of Service is not included when calculating the statute of limitations for filing suit or redeeming real property. This provision does not apply to periods of limitation under IRS laws.

Default Judgment

To obtain a default judgment against you, a plaintiff must file an affidavit stating that you, as the defendant, are not on military duty and have not requested a stay. You can reopen a default judgment if the affidavit is incorrect.

If you are sued while on active duty and a default judgment is entered because you failed to respond, send the court a written request to have the default judgment reopened. You must do so within 90 days of your release.

To reopen a default judgment, you must demonstrate the following:

  1. The default judgment was entered during Service or within 30 days of your release.
  2. You did not file an answer or make an appearance in court before the default judgment was entered.
  3. Military Service affected your ability to defend your case.
  4. You had a valid defense.

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SCRA INSTALLMENT CONTRACT PROTECTION

The SCRA offers you protection for the purchase of real and personal property, including motor vehicles. If you enter into an installment contract and miss payments before or during Service, the seller cannot terminate the agreement or repossess your property without a court order.

To qualify for this protection, you must demonstrate the following:

  • You have paid a deposit or installment before entering Service.
  • Military Service significantly affects your ability to make payments.

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MORTGAGES

The SCRA can provide you with temporary relief from your mortgage payments. To obtain temporary relief, you must demonstrate the following:

  • You entered into the mortgage agreement before the start of your active duty Service.
  • You owned the property before the start of your active duty Service.
  • You still own the property.
  • Military Service significantly affects your ability to make payments.

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SCRA INSURANCE PROTECTION

The SCRA prevents Servicemembers on active duty from losing health or life insurance coverage.

Health Insurance Protection

In accordance with TRICARE Reserve Select (TRS) provisions, you can have any health insurance coverage reinstated if it meets the following conditions:

  • You were called to active duty.
  • Coverage was in effect on the day before Service started.
  • Coverage was terminated during Service.

TRS applications must be submitted within 120 days of release. For more information on TRS, visit www.tricare.mil/Plans/HealthPlans/TRS?sc_database=web and click on "TRICARE Reserve Select."

Life Insurance Protection

If you cannot pay your premiums during Service or within two years of release, your private life insurance policy is protected against lapse, termination and forfeiture. The total amount of the life insurance protection cannot exceed $400,000, which is the maximum coverage offered by the Servicemembers Group Life Insurance (SGLI). You or your beneficiary must apply to Veterans Affairs (VA) for protection.

Professional Liability Insurance

If you are called to active duty, you can suspend your professional liability insurance during Service by sending a written request to the insurance carrier.

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SCRA LEASE TERMINATION PROVISIONS

Residential Leases

If you are called to active duty, you can terminate a residential lease signed before Service without legal repercussions. You must demonstrate all of the following:

  • You entered into the lease before the start of your active duty Service.
  • You signed the lease, or it was signed on your behalf.
  • You are currently serving, or you were called to active duty for 180 days or more.

You can also terminate a residential lease signed during Service if you can demonstrate any of the following:

  • You have received PCS orders.
  • You are deployed for 90 days or more.

Termination occurs 30 days after the next rental payment's due date. You must provide the landlord with written notice and a copy of your orders.

Motor Vehicle Leases

If you are called to active duty for 180 days or more, you can terminate an automobile lease signed before Service without legal repercussions.

You can also terminate an automobile lease signed during Service if you can demonstrate any of the following:

  • You are deployed for 180 days or more.
  • You have received PCS orders relocating you outside of the Continental U.S.

For More Information

SCRA provides other protections to help Servicemembers meet their legal and financial obligations. For more information or assistance, contact your local AFLA office or visit http://legalassistance.law.af.mil.

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FAQ

Q: When does the SCRA protect me?

A: Most SCRA protection starts the day you receive your orders to active duty. Be prepared to present a copy of your orders when asking about a right or benefit.

Q: How do I get loans reduced to 6%?

A: You must meet the following requirements to have loans reduced to 6% during Service:

  • You were not on active duty in any branch of the military when you took out the loan.
  • Your current annual interest rate exceeds 6%.
  • You have provided the lender with proper notice and a copy of your orders.
  • Military Service affects your ability to pay the loan at the regular interest rate (i.e., you earn less in the military than as a civilian).

Special legal issues apply to this benefit. Discuss your financial situation with an AFLA attorney to make sure you are eligible.

Q: Can I get out of the lease on my apartment?

A: To terminate a lease on a house, apartment or business location, you must meet the following requirements:

  • You have been called to active duty.
  • You signed the lease before entering Service.

Provide your landlord with written notice and a copy of your orders as soon as possible. Your landlord can charge rent up to 30 days after the next rental payment's due date.

Special considerations apply to business leases. Before terminating a lease on a business location, consult an AFLA attorney.

Q: How can I get a lawsuit delayed?

A: If you are involved in a civil suit while on active duty, your Commander can ask the judge for a stay of proceedings. Your Commander must show that military duty is preventing you from appearing in court. This provision does not apply to criminal charges.

This can be a complicated issue, so have your civilian lawyer contact an AFLA attorney to discuss the best way to proceed.

Q: As a self-employed worker, can I stop my health coverage and then restart it?

A: As long as you are on active duty, your health care needs are covered by military medical facilities. Your family members also become eligible, so you may want to stop your private health insurance coverage.

If you do so, your private insurer must reinstate your coverage once you are released from Service. The insurance company is also required to cover most pre-existing conditions.

Q: Do I have to pay state income taxes while on active duty?

A: If your home state taxes military income, you must pay those taxes. If you receive PCS orders relocating you to another state, only your permanent legal residence is considered for tax purposes. The state where you are temporarily located cannot tax your military income. However, it can tax any additional income you earn as a civilian through moonlighting or other sources.

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GLOSSARY

Affidavit: Written declaration made under oath or sworn to be true before a person legally authorized to administer an oath.

Default Judgment: Binding judgment in favor of the plaintiff when the defendant fails to respond to a claim or comply with court orders.

Defendant: Person being sued or accused.

Execution: Process of enforcing a court sentence or order.

Plaintiff: Person serving a complaint in a court of law.

Statute of Limitations: Federal or state law restricting the time within which a legal action may be taken.

Stay of Execution: Order to temporarily stop a judgment from being carried out.

Stay of Proceedings: Order to stop the judicial process temporarily or indefinitely.

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