When soldiers receive their deployment orders, they know they will have to step up and perform any challenge they encounter. If military spouses get their power of attorney papers, they do the same on the home front. Emotional stress and interruptions in family structure are expected, but financial struggles during a deployment may come as more of a surprise and prove tough to handle.
And that’s where a unique piece of legislation can help: the Servicemembers Civil Relief Act.
The SCRA provides a range of financial safeguards for active duty U.S. service members and their families. The act, which President Bush signed into law in December 2003, is basically an update and expansion of the Soldiers’ and Sailors’ Civil Relief Act passed in 1940.
The newer, wide-ranging SCRA covers a host of civil and fiscal obligations, such as mortgage payments, credit card debt and apartment leases.
Active duty members and Reservists and National Guard members on active duty are eligible to receive SCRA benefits from the start of their active duty to about 30 to 90 days after. This includes their dependents.
How the SCRA Can Help
Here’s a look at some of the key ways military spouses can utilize the Servicemembers’ Civil Relief Act:
Mortgage and Foreclosure
Lenders in most cases can’t foreclose upon or take a property because of mortgage debt while service members are on active duty and for up to nine months after discharge. The SCRA also provides caps interest rates at 6 percent for active duty service members and their families, no matter the loan type.
Leases and Eviction
The SCRA prevents service members and their families from being evicted because of failure to pay rent, so long as the monthly rent doesn’t exceed $2,932.21. The property must be considered the residential home of the member and dependents as opposed to an extra property. If an eviction notice is issued, spouses can submit an SCRA request to the court. Petitioners must show that the inability to pay is because of the service member’s military duties. If approved, the court can postpone the eviction for three months.
Service members can also terminate a lease if they receive deployment orders within 30 days of signing.
Credit Card Interest Rates
The SCRA provides a 6-percent cap on credit card interest rates. Once applied for, monthly payments are reduced by the interest saved for the time of active duty. Beyond that, any debt interest beyond the 6 percent is forgiven.
Special Deposit Program
The SCRA can offer financial opportunities along with financial relief.
Service members deployed to a combat zone or a qualified hazardous zone can take advantage of a Special Deposit Program that allows a 10-percent interest rate on any money deposited while deployed.
With a power of attorney, a spouse can start allotment payments up to $10,000 and receive a rate that is one to 10 times higher than banks and credit unions. The money will remain in the high interest account until the deployment ends, but can be withdrawn if hard times arise.