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Service Member's Civil Relief Act (SCRA)

The SCRA can be a useful legal tool for CG members. It was originally enacted in 1942, and may be found in the Appendix to Title 50, United States Code (50 U.S.C. App. 501 et. seq). Here are some of its provisions:

Reduced Interest Rates: Section 527 of the SCRA (50 U.S.C. App. 527) puts a 6% interest cap on debts incurred prior to entry upon active duty. The 6% interest rate applies only to debts incurred prior to entry on active duty, and does not apply to any loans, credit cards purchases, etc. made after the member began active duty. The SCRA also does not apply to federally-guaranteed student loans. The creditor (the person to whom the money is owed) may take the member to court and try to convince the court that the military service does not materially affect the member's ability to repay the loan. The court then can decide what interest rate should be charged. In other words, if the creditor shows that the service member is getting paid as much or more as he or she received before entering the military, a judge can override the 6% interest cap.

Here are some examples:

  1. Petty Officer X, USCGR, a successful businesswoman in civilian life, buys a car with a 12% loan while in an inactive status. She is then recalled to active duty, voluntarily or as part of an involuntary recall. Her military pay is less than her civilian earnings. She may use the SCRA to reduce the interest rate on the loan to 6%. Petty Officer X should send a letter to the lender asking for the 6% interest rate under the Service Member's Civil Relief Act, 50 U.S.C. App. 527. The letter should include the account number for the loan, the date she received the loan, the date she entered active duty, and that her active duty status has affected her ability to repay the loan. She should also include a copy of her orders to active duty, and a copy of a leave and earning statement (LES). If the lender refuses to reduce the interest rate, Petty Officer X should contact a legal assistance attorney.


  2. Petty Officer Y, USCG, has been on active duty for five years. He buys a brand new pick-up truck with no money down and a 14% loan. After two months, he decides he can't afford the payments. He's out of luck, and SCRA provides no protection on the interest rate.


  3. Ensign Z successfully completed Officer Candidate School and received his commission. He was a high school teacher before he went to OCS. His pay as an ensign is less than he was paid as a teacher. When he reported for active duty, he had an outstanding balance of $4000 on his VISA card. He can also receive protection under the SCRA, and should write a letter to the bank that issued the credit card to ask for a reduced interest rate (see example 1 above for more details). However, the credit card company is required to give the 6% interest rate only on his pre-active duty balance, and may charge its regular interest rate on any purchases he made after he reported for active duty.

Court Proceedings: The SCRA provides for a mandatory stay of civil court proceedings if the member's military service would interfere with his or her ability to represent himself/herself in court. This is intended to avoid penalizing someone who's underway or on the other side of the world performing military duty. However, a member who receives a legal notice should not ignore it! The member's command should send a letter to the court explaining why he or she can't take leave to be there (deployment, etc.), rather than have the legal office send something and the court determine that the member "appeared" because he or she was represented by an attorney.

Lease Termination: The SCRA provides for termination of pre-service leases when the member enters active duty. Again, this applies only to leases signed before the member enters active duty. A "military clause" is not automatically placed in every lease signed by a military member.

Legal Residency: The SCRA provides the authority for a military member to remain a domiciliary of one state even though he or she is stationed in a different state. For example, a military member who was a resident of Florida and intends to return to Florida upon release from his or her military obligations, may remain a domiciliary of Florida even though transferred to Virginia. As a result, the military member may not be subject to certain taxes or other requirements in Virginia.

SCRA has several other provisions, but it doesn't offer "full protection" just because someone is in the military. If you have specific questions, they please contact the legal assistance coordinator at (757) 628-4200.

Last Modified 1/12/2012