SCRA Benefits

The Servicemembers Civil Relief Act (SCRA) covers all actions and proceedings filed in any court. As a result, the bankruptcy court’s proceedings are subject to the SCRA’s provisions.

Will the SCRA Be Able to Aid Me in My Bankruptcy?

Yes, you can use the SCRA’s provisions during your bankruptcy process. The SCRA’s goal is to ensure that while you are on active service, certain civil liabilities, legal actions, and transactions that could disadvantage you and damage your civil rights are temporarily suspended.

When it comes to bankruptcy, the SCRA has the following powers: It can restrict what can be done to you if you are serving in the military.

For instance, the amount of time you are in active duty extends the amount of time the Trustee has to oppose a creditor’s attempt to place a lien on your property. This happens after you begin serving on active duty prior to the deadline for challenging the creditor’s action.

Permit you to prolong the time during which you may file a bankruptcy claim as well as the term during which proceedings may be launched against you.

For instance, even though the Bankruptcy Act specifies that a petition may be filed against you within four months of committing an act of bankruptcy (in which you typically are not paying your debts), the four-month period is not observed if the person has enlisted in the military within four months of committing this act of bankruptcy.

Does the SCRA Offer Any Additional Benefits?

Yes, the SCRA can give you numerous other benefits that may have an impact on your life in many other areas, including civil court proceedings, insurance, eviction, and many others. Here are a few of these advantages.

The Prevention of Entry of Default Judgments

Normally, before a default judgment can be recorded when a defendant is in default due to their failure to appear in court, the plaintiff must file an affidavit with the court. The defendant’s military status must be included in the affidavit.

If you are an armed forces member, the court may not order entry of judgment against you (the defendant) until after it has appointed a lawyer to represent you. If the court or your counsel decides there may be a defense, and the defense cannot be given without the defendant’s presence, they may ask the court to order a stay of proceedings for at least 90 days.

The SCRA gives you the right to reopen and overturn default judgments that have been rendered against you while you were on active duty or within 60 days after it ended. You must demonstrate that your inability to attend in person negatively affected you and that strong legal arguments support the claims made against you in order to have a default judgment overturned.

Court and Administrative Proceedings are Delayed

You can ask for the hearing to be postponed if you have received notice that you are required to appear in a judicial or administrative proceeding but cannot do so due to military obligations.

The proceeding may be put on hold for a minimum of 90 days. You must submit your request in writing and must:

• Give a date when you will be able to present and explain how your current military assignment will affect your capacity to do so.
• Include a letter from the commander stating that your obligations prevent your appearance at the hearing and that you do not have permission to take a leave of absence at that time. This email or request to the court won’t be viewed as a formal court appearance.

The court has the power to grant additional delays; however, if the court does, you must be represented by counsel.

Lease Terminations

If you get orders for a permanent change of station (PCS) or a deployment for a duration of 90 days or longer after signing the lease, you are permitted to terminate the contract under the SCRA.

You and your dependents are permitted to end car leases for personal or business use under the SCRA. If you obtain active duty orders for a duration of 180 days or more, the pre-service car leasing may be terminated. Suppose a service member obtains PCS orders to a location outside the continental United States or deployment orders for a duration of 180 days or longer. In that case, the car lease they signed while they were on active duty may be terminated.

The Interest Rate is 6%.

If you accumulated this debt before you began active duty, the SCRA allows you to, in certain situations, cut the interest rates on some of your loans and mortgage interest rates to 6%.

If you took out the loan when you were not serving in any capacity as an active duty member of the armed forces, you might be qualified for the 6% interest rate.

Currently, the annual interest rate is higher than 6%.

Your capacity to repay the loan at the standard (pre-service) interest rate is impacted by your military service.

You must provide a written notice to the lender and a copy of your military orders.

What Are SCRA Protections for the Military?

Special provisions are included in the Servicemembers Civil Relief Act of 2003 (SCRA) to support people who are actively defending the United States by taking part in military operations. SCRA offers safeguards that can apply to any case brought in any court. SCRA rules have requirements that apply in bankruptcy court.

Enforcing the SCRA is the responsibility of the Department of Justice’s Civil Rights Division. The Soldiers’ and Sailors’ Civil Relief Act of 1940 was expanded upon and revised by the SCRA.

The SCRA is a piece of federal legislation created to support and safeguard service members while they are engaged in active duty. An active duty military member who needs help paying for things like prepaid rent, rental agreements, credit card interest rates, mortgage interest rates, life insurance, and income tax payments, among others, may be eligible for SCRA support.

Can the SCRA Defend You from a Judgment by Default Being Entered?

The SCRA can indeed shield serving personnel from having default judgments entered against them. A default judgment may be rendered against them if a defendant does not appear in court. Naturally, if a person is actively serving, it’s possible that they won’t get a notification of the court date or won’t be able to show up in person.

A plaintiff often must file an affidavit stating whether or not the defendant is in the military before a default judgment may be rendered. If the defendant is a military member, the court must first appoint a lawyer to represent them before entering a default judgment.

Do I Need Counsel?

A knowledgeable finance attorney should be consulted if you are a member of the military and considering filing for bankruptcy to ensure that your SCRA rights are upheld. Although the SCRA is a complex piece of legislation, it offers advantages that can be crucial to your case.

A bankruptcy lawyer will know these advantages and ensure you utilize them. An attorney will be able to identify other advantages you are qualified for if you are not declaring bankruptcy.