The Servicemember’s Civil Relief Act guarantees that all current service members, National Guard troops and reservists have certain legal protections and provisions in relation to their civil and constitutional rights while they’re on active duty. The SCRA also relieves financial burdens for active military. The protections and provisions of the SCRA continue for approximately 30 to 90 days after members of the military are discharged while they acclimate to non-military life.
What are Some of the SCRA Benefits?
Loan Agreements
Financial institutions that commit to offering SCRA benefits, such as banks, loan companies, credit card companies and other lenders, provide service members low interest rates and waive certain fees. As of 2018, service members can ask for retroactive forgiveness of all but a six percent interest rate on any loan, including student loans and mortgages. They must provide a financial institution with a copy of their original military orders and a written notice before 180 days of post-discharge inactive status lapses. With mortgages, a lender must set the interest rate at six percent during service and for 12 months after. That said, retroactive forgiveness is also available, and the amount of time for the cap isn’t limited in any way. A career military service member can request retroactive forgiveness on a mortgage agreement for all active service years plus one additional year even if they served for decades. In most cases involving creditors and contracts, the service member must have signed the loan agreement before entering service.
Installment Agreements
Service members can also delay payments and cancel certain installment contracts with companies without penalties, depending on the nature of their deployment. All SCRA benefits recipients can delay payments without those delays adversely affecting their credit score, history or reports. Any mobilized or deployed service member who must live in temporary or permanent housing for 90 days or longer outside of the Continental United States (PCS OCONUS or OCONUS) can end a housing lease agreement. Those traveling for 180 days or longer can end a vehicle lease agreement. With the latter, the service member must have again signed the agreement prior to entering service. SCRA protections also guarantee that a lease provider must acquire a court order before repossessing a vehicle if the service member already made a payment or deposit. If a service member moves for 90 days or longer to a location where they can’t receive service through their current cell phone provider, they can also cancel their cell phone contract without penalties. Lastly, as of 2018, a service member can prevent tenant eviction on monthly lease agreements for $3,451.20 or less. They can also halt property foreclosure or the owner of a storage facility selling their things because of past due rent unless a judge issues a court order. Additionally, they can’t receive default judgments for not showing up to court during active service.
Income Taxes
In relation to income taxes, a service member is protected from double state taxation, which means that they can’t be required to supply income and other taxes to more than one state at a time even when deployed to different states during a year. A non-military spouse who moves with an active service member isn’t subject to taxes at the new duty station location. They must comply with tax laws in their legal home state. Any income that a service member earns through business or other enterprises outside of the military must be paid in the state where they’re stationed. A service member can also defer their tax obligation for the first 180 days after they’re discharged from service.
