The Servicemembers' Civil Relief Act of 2003 (SCRA), formerly known as the Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA), is a federal law that gives all military members some important rights as they enter active duty. It covers such issues as rental agreements, security deposits, prepaid rent, eviction, installment contracts, credit card interest rates, automobile leases, mortgage interest rates, mortgage foreclosure, civil judicial proceedings, and income tax payments. It also provides many important protections to military members while on active duty.

Note: Servicemembers give up some SCRA rights if they sign an agreement with a waiver during or after their military service.

Air National Guard Servicemembers serving on federal active duty (Title 10 for 30 days or more under section 502) are eligible for the Servicemembers Civil Relief Act starting on the date active duty orders are received, and, in limited situations, a Servicemember's dependents may also be eligible. Protection generally terminates one year after the date of discharge of active duty. Servicemembers who are absent from duty as a result of being wounded or being granted leave are also granted protection under the act.

The Six Percent Rule: A National Guard Servicemember has the ability to reduce consumer debt and mortgage interest rates to 6% under certain circumstances. This applies only to debts and mortgages that were entered into prior to entry on active duty. In the case of mortgages, this reduction in interest extends for one year from release from active duty.

Delay of Court and Administrative Proceedings: The SCRA permits active duty Servicemembers who are unable to appear in a court or administrative proceeding due to their military duties to postpone the proceeding for a mandatory minimum of ninety days upon the Servicemember’s request. This provision specifically includes Child custody hearings.

Termination of Leases: This benefit allows termination of leases by active duty Servicemembers who subsequently receive military orders for a permanent change of station (PCS), a deployment for a period of 90 days or more, or because of a stop move order (retroactive to March 2020). Rent amounts that are unpaid for a period preceding the date of lease termination are paid on a prorated basis. The lessor may not impose an early termination charge. Note the term “military orders” means official military orders including orders for separation or retirement 50 USCS § 3955.

Automobile Leases: This benefit allows termination of automobile leases leased for personal or business use by National Guard Servicemembers and their dependents if the Servicemember subsequently receives orders for a permanent change of station (PCS) outside the continental United States or from Alaska or Hawaii to the continental United States or a deployment for a period of 180 days or more. Lease amounts that are unpaid for the period preceding the termination date are paid on a prorated basis. The lessor may not impose an early termination charge.

Termination of Certain Consumer Contracts: This benefit allows termination of consumer contracts for commercial mobile service (includes cellular telephone service), internet access service, gym memberships, and home security services, at any time after the date a Servicemember receives military orders to relocate or deploy for a period of 90 days or more to a location that does not support the contract. A dependent may terminate a contract if the Servicemember is a beneficiary of the contact and could terminate it if the contract was the Servicemember’s. For any contract terminated under this provision the service provider may not impose an early termination charge.

Eviction for Nonpayment of Rent: Although the SCRA does not excuse National Guard Servicemembers from paying rent, it does afford some relief if military service makes payment difficult. Military members and their dependents (in their own right) have some protection from eviction under the Servicemembers' Civil Relief Act (SCRA), Section 301 (50 USCS § 3951).

Default Judgment Protection: If a default judgment is entered against a National Guard Servicemember during their active duty service or within 60 days thereafter, the SCRA allows the Servicemember to reopen that default judgment and set it aside if certain conditions are met. This section applies to any civil action or proceeding, including any child custody proceeding in which the defendant does not make an appearance.

Life Insurance Protection: The SCRA permits the National Guard Servicemember to request deferment of certain commercial life insurance premiums and other payments for the period of military service and two years thereafter.

Enforcement of Storage Liens: A Servicemember with property or effects subject to a lien, including liens for storage, repair or cleaning of property, is protected from foreclosure or enforcement of the lien during the period of military service plus three months unless a court finds that the Servicemember's ability to meet the obligation is not materially affected by military service. Sec. 307 (50 U.S.C. app. § 537).

State Taxation Clarification: The SCRA provides that a nonresident Servicemember's military income and personal property are not subject to state taxation if the Servicemember is present in the state only due to military orders. The state is also prohibited from using the military pay of these nonresident Servicemembers to increase the state income tax of the spouse.

A new provision of the SCRA (50 USCS § 4001(a)(3) – Election) extends protection to military spouses for any taxable year of marriage, to elect to use for the purpose of taxation the (1) residence or domicile of the Servicemember, (2) the residence or domicile of the spouse, or (3) the permanent duty station of the Servicemember. A spouse of a Servicemember shall neither lose nor acquire a residence or domicile for the purpose of taxation with respect to personal property or income by reason of being in a state solely to comply with military orders. Local JAG Legal Assistance attorney can help clients determine whether they meet these qualifications. To locate a Legal Assistance office, go to: https://legalassistance.law.af.mil/.

Health Insurance Reinstatement: The SCRA provides for the reinstatement of any health insurance upon termination or release from service if the insurance was in effect before such service commenced and terminated during the period of military service.

Foreclosures: The SCRA requires a court order before the foreclosure of a mortgage entered into prior to active duty. This protection extends for a period of nine months from release from active duty.

Seizure of Property: The SCRA requires a court order before a creditor can seize property secured by a purchase contract (specifically including automobiles) entered into prior to active duty.

Portability of Professional Licenses of Servicemembers and their Spouses:  This newly added provision of the SCRA (50 USCS § 4025a) affords Servicemembers and their spouses who possess a covered license and relocates because of military orders the right to have said license considered valid at a similar scope of practice in the new location (jurisdiction). A covered license is defined as a professional license or certificate that is (1) in good standing with the licensing authority of issuance, (2) that Servicemember or spouse has actively used during two years immediately preceding the relocation and (3) is a not a license to practice law.

Servicemembers and Family members with SCRA questions should contact their local Legal Assistance Office:
https://legalassistance.law.af.mil/

SCRA Consumer Compliance Handbook:
https://www.federalreserve.gov/boarddocs/supmanual/cch/scra.pdf

Department of Justice:
https://www.justice.gov/servicemembers/topics#financial

U.S. Code Chapter 50: Servicemembers Civil Relief:
https://uscode.house.gov/view.xhtml?path=/prelim@title50/chapter50&edition=prelim

SCRA Website-OSD:
https://scra.dmdc.osd.mil/scra/#/home