The Servicemembers’ Civil Relief Act is not a bankruptcy filing, but it can be applied to bankruptcy cases if they are filed against a member of the U.S. Armed Forces.

 

The act applies to all members of the military on active duty and to U.S. citizens serving in the military forces of U.S. allies during a war or military action. Its protections generally end when the service member dies or is discharged from active duty, but it can be extended 90 days past the date of discharge.

 

The purpose of the act is to allow our military to focus on their duties without the distractions of overwhelming civil action at home.

 

It allows for forbearance and reduced interest on certain debt obligations incurred prior to military service, and restricts default judgments against service members and rental evictions against service members and their dependents.

 

Portions of the act also apply to reservists and inductees who have received orders but have not yet reported for active duty or induction.

 

The act provides three primary areas of coverage:

 

Protection against default judgments 

The act spells out procedures that must be used in order to protect a member of the military from default judgments. In a nut shell:

 

  -  If you, as a defendant, fail to appear in an action filed

     by a plaintiff, the plaintiff must file an affidavit with

     the court before any judgment can be entered. It states

     whether or not you are in the military, or that the

     plaintiff was unable to determine whether you are in the

     military. If the court does not know whether you are in

     the military it may require a bond from the plaintiff as a

     condition of the judgment. The bond indemnifies you

     against any loss or damage from the judgment if the

     judgment or a portion of it is later set aside.

 

  -  A judge may not order entry of a judgment against you if

     you are in the military until after an attorney is appointed

     to represent you.

 

  -  The proceedings may be stayed for no less than 90 days if

     the judge determines there may be a defense in the case

     that cannot be presented if you are not there, or if your

     attorney has not been able to contact you to determine if

     a defense with merit exists.

 

  -  The judge can make further orders or judgments if they

     are needed to protect your rights under the act.

 

  -  If a judgment is entered against you while you are in the

     service or within 60 days of your discharge and you were

     prejudiced in making your defense because of your

     service, you can apply to have the judgment opened by the

     judge so you can present your defense. Before the case

     can be opened, though, you must prove that you have a

     meritorious or legal defense to at least a portion of the

     action.

 

Outside the default context, you can ask before final judgment is rendered to have a civil action stayed. The court will grant your application and stay the proceedings for at least 90 days if the application includes a communication setting forth the facts and demonstrating that your military service is keeping you from appearing – and you must provide a date when you will be able to appear, and a communication from your commanding officer stating that your military duty prevents your appearance and leave is not authorized at the time of the letter.

 

The court can grant additional stays if you apply again.

 

If you request it in an application, the judge must stay the execution of any judgment or order entered against you, and vacate or stay any attachment of garnishment of you property or assets if it finds your ability to comply is affected by your military service. This can be done before or after the judgment. And the judge may also decide it without an application from you.

 

You can be ordered to make installment payments during any stay.

 

 

  -  If an action for compliance with a contract is stayed under

     the act, contractual penalties do not accrue during the

     period of the stay.

 

  -  Generally, a landlord cannot evict you or your dependents

     from a primary residence without a court order. And in any

     eviction proceeding, the judge may adjust the lease to

     protect the interests of you and the landlord. If an eviction

     is stayed, the judge may garnish a portion of your military

     pay.

 

  -  You may terminate vehicle and residential leases if you are

     transferred after you enter into the lease.

 

  -  Some of the protections you receive under the act may be

     extended to those who have cosigned loans with you.