Debt Collection and Active Duty Servicemembers: What You Need to Know
You're on active duty...or you just got back from active duty in the past 30 to 60 days. You have been more than busy protecting your country. The last thing you need to worry about is the loss of your home, vehicle, or falling behind on your finances. If you have been on active duty in the U.S. Army, Navy, Air Force, Marines, National Guard, Reserve, or are a commissioned officer for Public Health Service (PHS) or the National Oceanic and Atmospheric Administration (NOAA), then you are protected by the Servicemembers Civil Relief Act (SCRA).
What SCRA Does
This Act protects all active duty servicemembers from the time they enter active duty, up to 30 to 90 days after discharge. In order for you to qualify for debt collection or interest rate reduction protection under SCRA, there are three basic conditions that must be met:
1. The agreement or loan must have been extended prior to your call to active duty.
2. Your financial status must have been affected by the call to active duty - interfering directly with your ability to pay the arrangement as previously agreed.
3. You will need to prove that you are no longer able to pay due to having been called to active duty.
How it Affects You
Invoking the rights provided under the SCRA will protect you from having your house or other property repossessed without a court order. Foreclosure is also prohibited during the time you are on active duty, as well as default judgments made against you (for not showing up in court; obviously, if you are away on active duty, it is not possible for you to come to court to defend yourself in any proceedings).
In other words, foreclosure and/or foreclosure proceedings will be delayed until your return, and court orders to foreclose cannot stand while you are away on active duty. The SCRA also protects you from negative credit reporting while you are on active duty - but a report to place an "active duty alert" on your credit report must be made to benefit from the protections that SCRA provides.
Furthermore, if you have placed your items in storage while you were away on active duty, the company providing the storage is prohibited from locking you out and/or seizing the property from you. This protection stays in place for up to 90 days after discharge from active duty.
Finally, under the SCRA, you are protected from automatic wage garnishments. In other words, if a judgment has been made against you, or a debt collector violated the SCRA, or if you were unable to be present in court (see above), then they are not allowed to take any portion of your wages/salary.
If you find yourself in a situation that violates your rights under the SCRA, you may wish to consult with an attorney and bring lawsuits against those who have caused damages to your credit report or who have tried to inappropriately repossess your property. You have done plenty to protect your country, and you deserve protection in return.
What SCRA Does
This Act protects all active duty servicemembers from the time they enter active duty, up to 30 to 90 days after discharge. In order for you to qualify for debt collection or interest rate reduction protection under SCRA, there are three basic conditions that must be met:
1. The agreement or loan must have been extended prior to your call to active duty.
2. Your financial status must have been affected by the call to active duty - interfering directly with your ability to pay the arrangement as previously agreed.
3. You will need to prove that you are no longer able to pay due to having been called to active duty.
How it Affects You
Invoking the rights provided under the SCRA will protect you from having your house or other property repossessed without a court order. Foreclosure is also prohibited during the time you are on active duty, as well as default judgments made against you (for not showing up in court; obviously, if you are away on active duty, it is not possible for you to come to court to defend yourself in any proceedings).
In other words, foreclosure and/or foreclosure proceedings will be delayed until your return, and court orders to foreclose cannot stand while you are away on active duty. The SCRA also protects you from negative credit reporting while you are on active duty - but a report to place an "active duty alert" on your credit report must be made to benefit from the protections that SCRA provides.
Furthermore, if you have placed your items in storage while you were away on active duty, the company providing the storage is prohibited from locking you out and/or seizing the property from you. This protection stays in place for up to 90 days after discharge from active duty.
Finally, under the SCRA, you are protected from automatic wage garnishments. In other words, if a judgment has been made against you, or a debt collector violated the SCRA, or if you were unable to be present in court (see above), then they are not allowed to take any portion of your wages/salary.
If you find yourself in a situation that violates your rights under the SCRA, you may wish to consult with an attorney and bring lawsuits against those who have caused damages to your credit report or who have tried to inappropriately repossess your property. You have done plenty to protect your country, and you deserve protection in return.
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