Servicemembers Civil Relief Act

Throughout the conversations on a possible government shutdown, I’ve heard several people mention the protections afforded under the Servicemembers Civil Relief Act (SCRA.)  The SCRA provides military members with a wide variety of legal protections, some of which might be helpful if the military pay is delayed.

The SCRA was signed into law in 2003  and replaces the previous Soldiers and Sailors Civil Relief Act.  Certain provisions were updated, rewritten and renamed.  The SCRA covers active duty military members and activated reservists and members of the National Guard who are serving on federal orders or Title 32 state orders that last for more than 30 days.

The SCRA is a long and sometimes complicated document, but I’ve summarized the key points below.

The major protections of the SCRA include:

  1. Termination of Residential Leases
  2. Automobile leases
  3. Evictions from Leased Housing
  4. Installment Contracts
  5. Six Percent Interest Rate
  6. Court Proceedings

Termination of Residential Leases:

Under the SCRA, a servicemember may terminate a residential lease for three reasons:  entering active duty, permanent change of station (PCS) orders, or orders to deploy for a period of not less than 90 days.  The servicemember’s name must be on the lease for the protections of the SCRA to apply.

The servicemember must put their request to break the lease in writing and must include a copy of their orders.  The earliest termination date for a lease is 30 days after the date on which the next regularly scheduled payment is due.  If you submit your request in March, and the next rent is due on 1 April, then you will be responsible for the lease for 30 days from 1 April.  Please keep in mind that these are the minimum protections that are guaranteed if there is no military clause in your lease.  If the military clause written into your lease gives you more protections, such as 30 days from date of notice, then that is the important part for you.

Automobile Leases

The automobile lease portions are very similar to the residential lease portions.  A servicemember is able to terminate a lease if they begin active duty, receive PCS orders, or deploy for 180 days or longer.  The primary differences are that the active duty service or deployment must extend beyond 180 continuous days.  For example, a reservist who attends basic training and a technical school for 120 days would not be able to use the SCRA to terminate his/her automobile lease.

To terminate the lease, the servicemember must make the request in writing with a copy of the orders attached.  The service member must then return the vehicle to the lessor within 15 days of delivering the notification.

The leasing company is prohibited from charging an early termination fee.  However, the lessee is still responsible for any taxes, title and registration fees, reasonable excess wear, and excess mileage fees.


Servicemembers may seek protection from eviction under the SCRA.  The leased property must be occupied by the servicemember and/or dependents as a residential dwelling.  The servicemember or dependent who has received an eviction notice must submit a request to the court to be protected under the SCRA.  If the court determines that the servicemember or dependents are unable to pay their rent on time as a direct result of the servicemember’s military duties, they may order that the eviction be postponed for up to three months.

Installment Contracts

If a servicemember has entered into an installment contract before entering active duty, and has made at least one on-time payment prior to entering active duty, a creditor may not repossess the property while the service member is on active duty without seeking a court order.

Six Percent Interest Rate

If a servicemember has debts that were incurred prior to entering military service, and if the servicemember’s military service has directly affected their ability to pay those debts, the servicemember can have the interest rate capped at six percent (6%) for the duration of the servicemember’s military service.

While this portion of the act requires that the servicemember’s ability to pay be directly affected by their military service, it is vastly easier for a creditor to just lower the interest rate than to go to court and establish that the military service has not affected the servicemember’s ability to pay. The servicemember should provide to the creditor written notice and a copy of their military orders.

Upon receipt of the notice, the creditor should reduce the interest rate effective the first day of active duty.  This is true even if the servicemember makes the request at a later time.

The creditor may not tack the extra interest back on when the servicemember leaves the military.  In addition, the amount of the monthly payment must be reduced by the amount of the saved interest.

In addition, you will find many creditors who will voluntarily lower the interest rate on all debt, as a courtesy to the servicemember.  This is not a direct result of the SCRA protections, but rather a generous gesture on the part of those creditors.

Court Proceedings

If a servicemember is a defendant in a civil proceeding, the servicemember may ask for a postponement if the servicemember submits a statement explaining how their current duty requirements prevent them from appearing, and submits a statement from their commanding officer explaining how their current duty requirements prevent them from appearing.

If a default judgment is entered against a servicemember during the servicemember’s period of military service, the court must agree to reopen the judgement for the purpose of allowing the servicemember to defend themselves if it is clear that the servicemember was unable to defend themselves due to their military service and they have a legal defense to the action.

As far as I can tell, the only portion of the SCRA that could have any bearing on a military pay delay is the protections against eviction.  None of the other provisions seem to apply to this situation.

UPDATE:  I am getting a lot of feedback that there are other provisions in the SCRA that apply to this situation.  I can’t find them, and I would love to get guidance on where it is located.  My favorite SCRA document is this one published by the Judge Advocate General’s School.  Please, please, read and help us all learn.

More UPDATE:  Aha, I’ve found it!  It is in section 523, which you can see here in Title II.  It states

If a servicemember fails to perform an obligation arising under a contract and a penalty is incurred arising from that nonperformance, a court may reduce or waive the fine or penalty if–

(1) the servicemember was in military service at the time the fine or penalty was incurred; and
(2) the ability of the servicemember to perform the obligation was materially affected by such military service.
I guess that maybe there is something to it.  I wonder if the creditors will be reasonable, or if they will make the servicemembers petition the court to get such relief.
You learn something new every day, and I’ve learned a ton this week.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • Crystal

    the eviction protection is indeed very interesting. I am hopeful that this will all be fixed prior to the eom pay but if for some reason it is not at least those of us not living in base housing or a military friendly rental will not have to worry about having no where to live. If only that protection extended to my utilities :p thank goodness we bank with NFCU and will not have to try to live off of half our normal mid month pay.

  • Wantingtoknow

    I have a question is there any protection for service members who receive PCS orders and cannot sell their home due to the housing market slump?


    Is there a provision in the Servicemembers Civil Relief Act (SCRA) that extends the 6% interest rate on credit to one year after the service member leaves active duty?

  • HelpForHomeowners

    We too are trying to sell a home that we bought July 2007. Because we haven’t sold, our family is living in different states due to PCS. Is there any relief for us?

  • rex

    if someone got a wal-mart credit card while i was deployed to iraq. do i have to pay for it. even if no one had power of attorney.

  • mm

    I have a question about the 6% under scara. Our house payments, the lender
    is giving us the 6%, but does the goverment pay the other 1.5% (7.5%) that we aren’t paying? What do they mean by forgotten? No one makes the differ-
    ence up?

    • KateKashman

      mm, if a servicemember has their interest rates lowered to 6% under SCRA, the interest rate is actually being lowered. There is no difference to be made up or forgotten. The interest accrues at 6% instead of 7.5%.

      P.S. You might want to seei if you are eligible to refinance your home. 7.5% is a very high interest rate for today’s market.

      Hope that helps.

  • Lisa

    I am trying to obtain information or get the current laws to include a retiree on military clauses. Retirees are allowed to reside in contract base housing. I have not been able to successfully rally the fact retirees are servicemembers though for my cause. Does anyone know how to go about adding retirees to the military clause so if they are offered housing they can break their lease?

  • Roni

    The protection should be extended… My daughter need braces so was on a payment plan for 23 months. It was no problem as had a little over 2 years left on station. Then got orders early and we have to pay dental office for remaining contact. And now will have to pay new dental office for treatment. And the dentist was located on base… Wish I had found a dentist that included a military clause. Wish MCCS required it from those venders they contract on base.

  • Davis

    Does the SCRA apply to South Korean cell phone contracts?