Summer 2005
Too many lenders, debt collectors, landlords, lawyers and judges are unaware of a federal law that protects families of deployed servicemembers, including the Guard and Reserves, from foreclosures, evictions and other financial consequences of military service.
Reports of lenders repossessing cars and foreclosing on homes owned by military members deployed overseas – despite federal law prohibiting these actions – are on the rise. Although most companies understand the law and try to follow it, others, such as smaller banks and car-loan companies, are not as enlightened.
The Servicemembers Civil Relief Act, signed by President Bush in 2003 as an expansion of a 65-year-old federal law, provides several safeguards for all deployed troops: protection from foreclosure and eviction, payment deferral for federal taxes, a six percent cap on consumer and mortgage interest-rate debt if military duty has reduced the family’s income, and a stay on civil proceedings such as divorce and bankruptcy.
But military families must understand that help is not automatic – you need to ask for it. To invoke your rights, you must notify your creditor or landlord of your military status by sending a letter asking for relief under the Act along with a copy of current military orders.
Active-duty military members may contact their local military legal assistance offices to assist them in understanding and enforcing their rights under the Act. The legal assistance attorneys can draft letters or make phone calls, if necessary, to help solve the problem. Download a detailed overview and a copy of the complete legislation at www.taxtopics.net/SCRA.htm.