An old law recently got a new name. Effective December 19, 2003,
the Soldiers and Sailors Civil Relief Act was revised and renamed. The new law
is now the "Servicemembers Civil Relief Act" or SCRA for short. Anything you see
entitled "Soldiers and Sailors Civil Relief Act" or "SSCRA" should be reviewed
for accuracy because the new law includes some big changes.
The SCRA offers protections to MILITARY personnel in recognition
of the special demands placed upon those serving on active duty. Here's a quick
summary of the new provisions (with comparisons to the old law in parentheses).
Motor Vehicle Lease Termination - One of the more significant new
provisions is an added protection for motor-vehicle leases. Any active-duty
servicemember who has received PCS orders outside the continental United
States, or who is being deployed for 180 days or more, may terminate a
motor-vehicle lease. The law prohibits early termination charges. This is BIG
CHANGE and BRAND NEW! (Previously, there was no protection.)
Residential Lease Termination - Any servicemember who has received
permanent change-of-station orders or who is being deployed for 90 days or
more now has the right to terminate a housing lease with 30 days' written
notice. This is a BIG CHANGE. (Previously, servicemembers could be required to
pay for housing they were unable to occupy unless there was a "military
clause" in their lease or they lived in one of only a few states with a law
allowing for early termination.)
Automatic Stay - An automatic 90-day delay of judicial hearings (think
"judge" and "courtroom") and administrative hearings (like those often used
for child support determinations) upon application by the servicemember. This
is a BIG CHANGE. (Previously, stays were discretionary with the court and not
applicable to administrative hearings.)
Eviction Protection - Servicemembers and their families cannot be evicted
without court order for a lease of $2,465 or less. (Previously, servicemembers
and their family who entered into a lease for $1,200 or less could not be
evicted without a court order.)
Spouse's Tax Bracket - Adds a provision that should prevent states from
increasing the tax bracket of a nonmilitary spouse who earned income in the
state where the military member is now assigned. As you should know, military
pay is subject to income tax only by the member's state of "domicile" - which
often is NOT the state where the member is assigned. However, a spouse's
income is subject to local state income tax. Many states artificially inflate
the tax burden on a spouse's income by adding in the service member's military
income for the limited purpose of determining the nonmilitary spouse's tax
bracket. This practice has had the effect of increasing the military family's
tax burden. This is BIG CHANGE and BRAND NEW! (Previously, there was no
protection.)
Six Percent (6%) Interest Rate - Pre-service loans (including mortgages,
car loans and credit cards, but excluding student loans) often can have their
interest rate capped at 6% effective the day a member enters active duty. The
new law clarifies the rule and specifies that interest in excess of 6% per
year must be FORGIVEN - as in YOU DON'T OWE IT. Servicemembers are now
required to request the reduction in writing and include a copy of their
orders bringing them on active duty. Keep in mind, the 6% cap only applies to
loans entered into prior to active duty, not those signed later. (Previously,
there was some question about "forgiveness of the interest.)
Questions or need more info? Contact Mr. Steve Lynch, Ninth District
Legal Assistance Attorney at (216) 902-6010 or e-mail him at
Stephen.T.Lynch@uscg.mil.
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