Something to keep in mind if considering a military career

Financial benefits of The Servicemembers Civil Relief Act (SCRA).

The Servicemembers Civil Relief Act (SCRA) is a federal law that makes available safeguards and protections for U.S. military members as they join active duty or are already on Active Duty. SCRA covers only Active Duty military personnel. If a National Guard member or Reservist is not on Active Duty, but are only meeting once a month, they are not covered. SCRA covers a person when they “enter active duty” and as a rule concludes up to 90 days they leave active duty. Please do not confuse “entering active duty” with “enlisting for active duty” which is the day a person signed up/enlisted, but may not leave for active duty for up to a year. Until a person actually leaves for initial training, they have not entered active duty and are not covered by SCRA.

SCRA limits or keep a tight rein on actions against active duty members in the areas of personal financial management matters, such as automobile leases, credit card interest rates, mortgage interest rates, security deposits, eviction, rental agreements, installment contracts, mortgage foreclosure, civil judicial proceedings and life/health insurance. The intended purpose is to suspend or postpone specified civil obligations that will enable active duty military members the ability to dedicate their full consideration and attention to their duties and ease financial stress on their dependents (family members) of those who are deployed overseas.

One example in how SCRA can help is it limits credit debt to six percent interest that was set prior to entering active duty, and once a service member is on active duty. This means that interest rates are capped at six percent on credit obligations (even debts acquired prior to active duty), and the percentage above six percent is permanently discharged. Moreover, monthly payments must be decreased by the amount of interest saved during the period that was covered.

Another significant condition under the new Servicemember’s Civil Relief Act is that it defends a military dependent (spouse or children) from being evicted while a person is serving on active duty. As long as the rent dollar amount does not go above $2720.95 per month, a landlord must get a court order to authorize an eviction. This is regardless of whether rent began before or after entering into active military duty. Furthermore, if a military member is officially told they are being deployed overseas or transferring duty stations (moving to another state); they are allowed to terminate a lease agreement.

For more in on this subject please visit the SCRA website or the HUD website, or contact a Michigan State University Extension educator.

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