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Servicemembers Civil Relief Act Overview

Servicemembers who are called into active duty, are deployed, or are entering the military; most likely have major concerns beyond paying bills on time and maintaining a good credit history. The Servicemembers Civil Relief Act (SCRA), which expanded the Soldiers’ and Sailors’ Civil Relief Act, helps servicemembers retain good credit and eliminate financial stress while serving in the military.

The SCRA can help with a variety of financial concerns, such as:

Housing and automobile obligations
  • Servicemembers and their families are protected from being evicted for nonpayment of rents (up to a specified level that is annually adjusted for inflation).
  • Permits servicemembers who have been permanently or temporarily relocated to a new location to end a housing lease.
  • Allows for servicemembers to end an automobile lease under certain conditions.

Debt obligations
  • A limit of an interest rate of six percent (on credit incurred prior to military service only) can accrue on debt obligations while a service member is on active duty. After the service member retires or otherwise leaves active duty, any interest that accrued over the six percent cap must be forgiven. 

Lawsuits and trial obligations
  • Servicemembers can request a stay for any civil lawsuit (does not apply to criminal lawsuits) against them if their active duty status prevents them from being able to appear in court. 

Tax obligations
  • Allows a servicemember to retain their state residency for tax purposes, even if they are relocated to another state.

The SCRA covers members of the U.S. Military who are on active duty, as well as those reservists and National Guard members who have been called to active duty.