Members of the military involved in active duty, protecting the homeland, or sent overseas, have special protections accorded to them in case of monetary problems and bankruptcy. The Servicemembers’ Civil Relief Act (SCRA) is a federal law designed to protect the rights of the servicemembers in case of civil actions, including a bankruptcy filing.
What is SCRA?
The SCRA is an act that allows servicemembers to focus their energies on the defense of the country while it takes care of any administrative proceedings which may cause them to lose focus. This is done by temporarily suspending judicial and administrative proceedings against them and allowing reduced interest on any financial obligations acquired before joining the military. Apart from this, the SCRA also restricts rental evictions or default judgments against them and their dependents. SCRA applies to all U.S. military service members on active duty, whether within the country or serving overseas. However, the SCRA provisions end when the service member is discharged from active duty, within 90 days of discharge, or when they die. Some part of SCRA also applies to inductees who have not yet been inducted into the military or have not yet reported for active duty. SCRA can also protect service members in case of bankruptcy proceedings.
Protections provided under SCRA
The SCRA provides protection in the following areas:
- Protection against entering default judgments against servicemembers – To protect servicemembers against entry of default judgments, SCRA has established a procedure that must be followed in civil proceedings. The plaintiff must file an affidavit in the court that must clearly mention that the defendant is in the military. Once specified, the court cannot enter any judgment against the servicemember until it appoints an attorney to represent the defendant. The court will also grant a stay on proceedings for a minimum of 90 days if there is a defense and the defendant is required for it, or the defendant’s attorney could not contact the defendant, even after due diligence.
- Putting a stay on proceedings if the servicemember is served notice – If a notice has been served to the servicemember, they can ask for a stay on the proceedings. The court can grant a stay for at least 90 days if the defendant’s current duties prevent them from appearing in the court, or they receive a communication from the commanding officer of the servicemember specifying that the current military duty prevents the defendant’s appearance, and military leave cannot be authorized at the required time. The court can grant an additional stay if it receives further notification regarding this situation.
- Putting a stay on the execution of judgment and garnishments – The court can also put a stay on executing any order or judgment entered against a service member. Suppose the service member cannot comply with a judgment or garnishment due to their military service. In that case, the court can put a stay on the judgment or garnishment. The stay can be for the duration of the military service and an additional 90 days after being discharged from the service. The service member may be ordered to pay in installments during the stay order’s duration.
- Protection against eviction – Additional protection also includes against the eviction of the service member or their dependants from the primary residence without a court order. The court can also adjust lease obligations and provide relief to the landlord by ordering wage garnishments.