The SCRA may be one of the most important benefits of joining the military. Learn how it can protect your finances while you serve.
The Servicemembers Civil Relief Act (SCRA) provides legal and financial protections for members of the armed services, the Public Health Service, and the National Oceanic and Atmospheric Administration. SCRA benefits cover a wide variety of financial areas, including rental agreements, interest rates, certain judicial proceedings and tax payments.
Who does SCRA cover?
The SCRA covers full-time, active duty service members for all five branches of the military, the Public Health Service, and the National Oceanic and Atmospheric Administration. Reservists called to federal active duty are covered, as are National Guardsmen called to national emergency federal orders lasting more than 30 days. Service members who are lawfully absent from duty due to sickness or injury are covered as well.
For full-time active duty service members, protections kick in on the day service begins. For Reservists and members of the National Guard, protections start the day they are notified of a call to active duty.
What does SCRA cover?
The act covers a number of benefits, from complex taxation needs to basic day-to-day financials. Here are some commonly used protections and benefits:
- Interest rate limits: Interest rates on most loans or debt you accrued prior to military service are capped at 6 percent during your service.
- Foreclosure protection: If your mortgage was originated before your military service, you may not be foreclosed upon while in military service and for one year after.
- Eviction protection: You and your dependents are protected from eviction. As long as your rent doesn’t exceed a certain amount (this amount changes each year), a landlord must have a court order to evict you.
- Judicial proceedings: You are not required to appear in civil court while serving. This includes proceedings such as divorce and child support, as well as foreclosure.
- Lease and contract termination: If you have a cellphone contract, which does not provide coverage in your new area, an auto lease, or a residential lease that you need to terminate due to relocation (or a deployment of more than 90 days), you can terminate those contracts.
- Repossession protection: If you obtained a personal property secured loan, (e.g. a car loan), before you began military service, the item cannot be repossessed without a court order. You must have paid a deposit or one installment payment prior to military service.
- Tax relief: Provisions in the SCRA prevent a certain form of double taxation that occurs when you or your spouse work in a state different than your permanent residence. It also allows you to file for deferment of the April tax filing deadline, assuming certain conditions are met..
Note that this list of benefits is not comprehensive, and for more information —including additional detail and context for these benefits — visit the Department of Justice website.
What doesn’t SCRA cover?
A number of financial transactions are not protected, including:
- New loans or debt: Contracts entered into during your service are not protected by the SCRA. This act applies specifically to loans taken out prior to active service.
- Income taxes: While the SCRA allows for certain filing delays and helps protect you from double taxation, you and your family are still required to file with the IRS each year.
- Criminal judicial proceedings: While the SCRA protects you from having to appear in civil court, if you are charged with criminal acts, the SCRA does not protect you from those court appearances.
How do I access my SCRA protections?
In most cases, you can contact your lender, landlord or service provider with a written record of the relevant information, such as relocation paperwork or deployment documents.
Ultimately, the SCRA is enforced by the Department of Justice and the attorney general. If your landlord or a lender is not complying with the terms of the act, your first step is to go to the legal assistance offices within your military branch to ask that the case be reviewed. If these offices can’t resolve the issue, they’ll bring them to the Justice Department.
For more on the SCRA and financial support for military members, contact the U.S. Bank Military Service center.