Creditors still unaware of relief act intended to protect active-duty soldiers
March 28, 2005
A revised statute providing clearer and more protective relief for active-duty soldiers was signed into law in December 2003, but many of those in charge of interpreting and enforcing the law are unaware of the federal statute, causing lenders to illegally foreclose against active-duty service members.
The law, the Servicemembers Civil Relief Act, is supposed to protect all active-duty military families from foreclosures, evictions and other financial consequences of military service. Providing a wide range of protections to service members, their spouses and their dependents, the relief is not being properly enforced and has involved nationally prominent companies like Wells Fargo and Citigroup.
Despite efforts by military lawyers, credit industry organizations and some state courts and bar associations to spread the word about the new law, bankers and military lawyers believe the largest problem is that the enforcement of the act relies on the service members themselves notifying their creditors or landlords of their military status in order to call upon their rights under the act. This places even more burden on a soldier preparing for overseas duty and can often be improperly carried through.
Military law specialists say too many lenders, debt collectors, landlords, lawyers and judges are unaware of the federal statute or do not fully understand it, especially in unlikely places because of the Pentagon's increased reliance on Reserve and National Guard units coming from untraditionally military towns. Many of these creditors and courts, as a result, have never dealt with the relief act if the units are called up.
The Supreme Court has ruled that the law's provisions must "be liberally construed to protect those who have been obliged to drop their own affairs to take up the burdens of the nation." The law is an updated version of the Soldiers' and Sailors' Civil Relief Act adopted on the eve of World War II. In July 2001, a federal court ruled that service members could sue violators of the relief act for damages, and following the September 11 terrorist attacks Congress took up a long-deferred Pentagon proposal to update the old act.
Although refusal to comply with the act is illegal, many service members may not have the time or the money to fight back and hire a lawyer. Unfortunately, according to court records and interviews with military and civilian lawyers, the illegal demands from financial companies trying to collect on obligations they are not allowed to enforce on active-duty service members are not unusual events.
Servicemembers Civil Relief Act includes
- Protection from repossession or foreclosure without a court order
- Allows termination of any real estate lease when their military orders require them to do so
- Forbids judges from holding service members in default on any legal matter unless the court has first appointed a lawyer to protect their interests
- Interest rate on debts incurred before enlistment must be capped at six percent if military duty has reduced a service member's family income
If you have had illegal demands made against you or your spouse by creditors trying to collect on obligations while being active-duty, please contact us to learn more about your rights under the Servicemembers Civil Relief Act.
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