Serving in the military often means juggling the demands of duty with everyday responsibilities, like managing bills, loans, and leases. The Servicemembers Civil Relief Act (SCRA) was created to ease that burden. Whether you’re on active duty, deployed overseas, or preparing for deployment, the SCRA provides important financial safeguards so you can focus on your mission without worrying about money matters back home.

 

What Is the SCRA?

The SCRA is a federal law that offers a wide range of financial and legal protections to active duty servicemembers, including members of the National Guard and reservists who are called to active duty. These protections also extend to certain dependents.

 

Key Financial Protections Under SCRA

1. Interest Rate Cap:

If you took out loans or credit cards before entering active duty, the SCRA limits the interest rate to 6% during your service period. This includes credit cards, mortgages, car loans, and other debts. Any interest above 6% must be forgiven, not just deferred.

 

2. Protection Against Default Judgments: 

If you’re unable to appear in court due to military service, the SCRA can delay or set aside default judgments. This prevents creditors or landlords from winning a lawsuit simply because you couldn’t attend.

 

3. Lease and Housing Flexibility:

Need to move because of deployment or a permanent change of station? The SCRA allows you to terminate housing leases and vehicle leases without penalty when you have qualifying military orders.

 

4. Foreclosure and Eviction Protection:

The law provides safeguards against foreclosure and eviction, ensuring that you and your family aren’t forced out of your home while you’re serving.

 

5. Protection from Repossession:

Your vehicle or other financed property cannot be repossessed without a court order if you made a payment before entering active duty.

 

Life in the military can be unpredictable. Unexpected deployments or transfers can create financial stress that civilians rarely face. The SCRA helps level the playing field, giving servicemembers the time and flexibility they need to manage obligations without damaging their credit or losing essential property.

 

How to Take Advantage of SCRA Benefits

• Notify Your Lenders: You must request the 6% interest rate cap in writing and provide a copy of your military orders.
• Keep Records: Maintain copies of all correspondence and orders to prove eligibility.
• Seek Professional Guidance: A financial counselor can help you navigate the paperwork and ensure you receive every protection you’re entitled to.

 

💡Tip: Louisiana has its own Servicemembers Civil Relief Act (SCRA) protections. Under Louisiana Revised Statute § 29:312, if you (or your spouse) are deployed on active duty, the interest rate on eligible debts you entered into on or after June 29, 2005 can be capped at 6% during the deployment period, as long as you give the creditor written notice and a copy of your orders within the required time frame.

 

Contact Us Today for More Information

If you have questions or need help applying for SCRA benefits, our financial counseling team at Walters Financial Wellness is here to assist. Contact us today to schedule a consultation.