SOLDIERS' & SAILORS' CIVIL RELIEF ACT OF 1940
by Laura Dreznes, ATG Law Clerk

Introduction

Many Americans leave their families, homes, and day jobs to serve in the United States military. While these Americans devote all their energy to defending our country, they often compromise financial obligations and their abilities to assert their legal rights. The Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA), however, serves to protect and preserve the civil recourses of these Americans.

The SSCRA applies to all members of the United States military who are on active duty, as well as those in training or education for the military. 50 USCS Appx § 511(1). Members of the United States military who are on active duty are those who serve our country every day, regardless of whether there is a war or not. This act also protects reservists, beginning on the date the military orders them to report for military service. § 516. Further, the SSCRA applies to National Guard members ordered to federal service. See Bowen v United States, 49 Fed Cl 673 (US Fed Cl 2001). (For purposes of the SSCRA, "active duty" specifically excludes "full-time National Guard duty." A member on full-time National Guard duty has been defined as a member of the National Guard of a State.) The SSCRA affords temporary suspensions of legal proceedings and transactions, including real estate litigation and transactions. § 510. The SSCRA, however, does not cover legal proceedings and transactions regarding a written agreement executed by a service member during or after his or her service period. § 517.

Legal Time Periods - The SSCRA excludes a service member's time of service from any legally prescribed time period, e.g., statute of limitations. Service time is also excluded from any period provided by law for the redemption of real property sold or forfeited to enforce any obligation, tax, or assessment. § 525. However, service time is not excluded from any time period under the internal revenue laws of the United States. § 527.

Court Proceedings - When a service member's military service materially affects that member's ability to represent him- or herself in a court proceeding, the SSCRA allows the action to be stayed at the court's discretion. § 521. The court may stay the execution of any judgment, and vacate or stay any garnishment of property or money. § 523. The SSCRA allows a court to order any stay of an action or execution of judgment for the period of the member's military service, plus another three months. § 524. If the service member is a codefendant, then the plaintiff may proceed against the other codefendants not in the military, by leave of court. § 524. If an action for compliance with a contract is stayed, then no fine or penalty will accrue for failing to comply with the terms of the contract during the stay. § 522.

Six Percent Interest Rates

Acknowledging financial difficulties that may arise during a service member's absence, the SSCRA restricts all interest rates incurred before entry into the service to 6% per year, including mortgages. § 526; see also Moll v Ford Consumer Finance Co, Inc, 1998 WL 142411 (ND Ill 1998). (A legal action does not need to be brought against a service member for interest rates to be reduced. Interest rates are reduced when a service member informs a debtor of the SSCRA.) However, if a service member's service does not affect the ability to pay the interest on an obligation at a rate in excess of 6% per year, then this provision of the act is not applicable. § 526.

Eviction from Leased Housing - The SSCRA provides protection for a service member's home, whether rented or mortgaged. If a service member's rent does not exceed $1,200 per month and the premise is occupied for dwelling purposes by dependents, then no eviction or distress may be made. § 530(a). Any person who knowingly takes part in an eviction or distress, or attempts to do so, may be fined and/or imprisoned for up to one year. § 530(c).

Mortgage Obligations - The SSCRA applies to a service member's obligations on real or personal property secured by a mortgage, trust deed, or other security in the nature of a mortgage. § 532(1). If such an obligation originated before the member entered the service, then a legal proceeding enforcing the obligation can be stayed at the court's discretion. § 532(2)(a). Any person who knowingly makes any sale, foreclosure, or seizure of property, or attempts to do so, may be fined and/or imprisoned for up to one year. § 532(4).

Recently Purchased Property - The SSCRA protects deposits on or purchase price installments for, real or personal property paid before the member's military service. § 531(1). An assignor may not rescind or terminate a contract for nonpayment during the service member's service period. § 531(1). Any person who knowingly resumes possession of the property, or attempts to do so, may be fined and/or imprisoned for up to one year. § 531(3).

Terminating Leases - Under the SSCRA a service member may terminate a lease without penalty, if the service member executed the lease before serving in the military and the service member or dependents occupied the premise. § 534(2). If the lease called for monthly rent, then termination will be effective 30 days after the date of the next rental payment. For all other leases, termination will be effective on the last day of the month following the month during which notice is delivered. The lessor must prorate unpaid rent for a period preceding termination and refund rent paid in advance for a period succeeding termination. § 534(2). Any person who knowingly seizes, holds, or detains any personal effects or property of a service member who lawfully terminates a lease, or who interferes with the removal of such property from the premises, may be fined and/or imprisoned for up to one year. § 534(3).

Conclusion

The SSCRA provides valuable protection for service members' homes and family members. The SSCRA reduces interest rates, allows families to stay in their homes, and allows payments on financial obligations to be stayed. Although there is no way to pay back those American service members who courageously stand behind our country, the SSCRA provides a good start.

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