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The Servicemembers Civil 

Relief Act (SCRA) 

The Servicemembers Civil Relief Act 

(SCRA) provides legal and financial 

protections to those who have 

answered the Nation’s call to serve. 

Introduction

The SCRA is a law created to provide extra 

protections for servicemembers in the event that 

legal or financial transactions adversely affect their 

rights during military or uniformed service. These 

protections enable servicemembers to devote their 

entire energy to the defense needs of the Nation. 

The SCRA applies to the following servicemembers:

§ Active duty members of the Army, Marine Corps, 

Navy, Air Force, and Coast Guard;

§ Members of the Reserve component when 

serving on active duty;

§ Members of the National Guard component 

mobilized under federal orders for more than 30 

consecutive days; or

§ Active duty commissioned officers of the Public 

Health Service or the National Oceanic and 

Atmospheric Administration.

SCRA rights may be exercised by anyone holding 

a valid power of attorney for the servicemember. 

Some SCRA protections also apply to dependents. 

According to the U.S. Department of Justice, these are 

five protections that servicemembers often ask about.

Protection #1

Servicemembers can reduce the 

interest rate on any pre-service 

loans to a maximum of 6 percent

If you took out an automobile, home, or student 

loan or incurred credit card debt prior to becoming 

a servicemember (also known as a “pre-service 

obligation”), or if you took out such a loan jointly 

with your spouse, then you are entitled to have your 

interest rate reduced to a maximum of 6 percent 

per year. To receive this benefit you must notify 

your lender in writing and include a copy of your 

orders to active duty service or a letter from your 

commanding officer that shows the date you began 

active duty service. 

The rate reduction for pre-service obligations 

applies during the period of active duty service for 

most loans and, for mortgages, for an additional 

year after the end of active duty service. When 

you make a proper request for an interest rate 

reduction under the SCRA, your lender must 

reduce your interest rate on pre-service obligations 

to 6 percent for the entire time you are serving on 

active duty. Your lender can’t add the amount of 

interest above 6 percent back into the loan later 

on after you leave active duty. You can request an 

interest rate reduction from your lender at any time 

while you are serving on active duty and up to 180 

days after release from active duty. 
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A lender can’t revoke your loan or credit account, 

change the terms of your credit, or refuse to grant 

you credit just because you exercised your SCRA 

rights. In addition, a lender can’t furnish negative 

information to a credit reporting company just for 

invoking your SCRA rights. Remember, the SCRA 

requires your lender to reduce your interest rate 

in certain circumstances – but you still have to pay 

back your debts.

Protection #2

Servicemembers have some 

protections against default 

judgments in civil cases

If you are sued while a servicemember on active 

duty, you have certain legal protections under 

the SCRA. These include some protections from 

a default judgment in a civil action. A default 

judgment is a court order in favor of the party or 

“plaintiff” suing you when you did not appear or 

defend yourself against the lawsuit. 

Some of your rights under the SCRA include:

§ Before the court can enter a default judgment, 

the party suing you must file an affidavit with the 

court stating whether or not you are in active 

duty service, and provide facts in support of that 

statement. If the party suing you is unable to 

determine whether you are in active duty service, 

the affidavit must state that fact.

§ If you are in active duty service and have not 

appeared in a case against you, the court 

may not enter a default judgment until after it 

appoints an attorney to represent you. 

§ The court also has to permit a delay of 

proceedings for at least 90 days if certain 

conditions are met. 

Protection #3 

Servicemembers have special 

protections against foreclosure on 

their home

If you took out a mortgage before entering active 

duty service, you can’t be foreclosed on without 

a court order, unless you have waived your rights. 

This protection applies while you are on active duty 

and for an additional one year after leaving active 

duty. This protection also applies in states that do 

not require a court order to foreclose and whether 

or not you told your lender or servicer about your 

servicemember status.

Under this SCRA protection, a court may also on its 

own – and must upon request by a servicemember 

– pause or stay a foreclosure proceeding or adjust 

the loan, provided that the servicemember’s ability 

to pay the loan is materially affected by his or her 

active duty service.

As noted in protection #2, the SCRA also provides 

servicemembers with protections against default 

judgments, which are rulings against a party to a 

lawsuit because he or she didn’t appear in court. 

This protection applies to foreclosure cases before 

a judge. 

Protection #4

Servicemembers have special 

protections against repossession of 

their property

In some circumstances, the SCRA prohibits 

creditors from repossessing your personal property, 

including your vehicle, without a court order. That 

means that even if you violate a contract by, for 

example, failing to make your monthly payments, 

the creditor must first file a lawsuit and get an 
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order from a judge before your vehicle or personal 

property can be repossessed. This protection 

applies only if you:

§ purchased or leased a vehicle, or other personal 

property, before entering active duty service; 

and

§ made a deposit or installment payment on a 

vehicle, or other personal property, before 

entering active duty service. 

These federal protections under the SCRA are in 

addition to any other protections you might have 

under your state law. 

Even if you’re protected by the SCRA from 

repossession without a court order, failing to pay 

your bills could result in violating your contract. As 

a result, you may be charged fees associated with 

your failure to pay, such as a late fee. Your missed 

payments can also be reported to credit reporting 

companies, and the creditor can try to collect the 

debt, including by filing a lawsuit against you. 

Protection #5

Servicemembers may be able to 

terminate residential housing and 

automobile leases without penalty

The SCRA provides servicemembers with the 

right to terminate residential leases of property 

that is occupied or intended to be occupied by a 

servicemember or his or her dependents. If you 

signed a lease for housing prior to active duty 

service, or if you’re already serving on active duty 

and receive Permanent Change of Station (PCS) or 

deployment orders for a period of at least 90 days, 

then you should be able to terminate your housing 

lease without penalty.

To terminate your housing lease, you or someone 

exercising a power of attorney on your behalf 

must submit to your landlord a written notice of 

termination and a copy of your orders – or a letter 

from your commanding officer – by hand delivery, 

or by private carrier, or by regular postal mail with 

return receipt requested.

If your lease requires monthly rent payments, 

termination of a housing lease is effective 30 days 

after the first date on which the next rental payment 

is due and payable after the date on which the 

termination notice is delivered.

In addition to this right for residential leases, under 

certain circumstances, the SCRA also allows 

servicemembers to cancel or terminate an auto 

lease without paying early termination charges 

or penalties. In order to terminate an auto lease 

without penalty under the SCRA, you must have 

entered into the lease: 

§ Prior to entering active duty, and then been 

called onto active duty for 180 days or longer; or

§ During active duty, and then received orders for:

a PCS from a location inside the continental 

United States (CONUS) to a location outside 

the continental United States (OCONUS), or 

a PCS from a location OCONUS to any new 

location, or 

deployment with a military or uniformed 

unit or in support of a military or uniformed 

operation for 180 days or longer.

Carefully read your lease terms and consider your 

situation before signing a contract. The SCRA does 

not allow you to terminate your contract if you 

receive PCS orders from one CONUS location to 

another CONUS location, so if you know you may 

receive those type of PCS orders, make sure your 

lessor will allow the vehicle you intend to lease to 

be taken out of state.

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Conclusion

The SCRA provides many legal and financial 

protections to enable servicemembers to focus 

on their mission with less worry about what is 

happening back home. 

If you have any questions about your rights under 

the SCRA, contact your closest military legal office 

for more information. You can find the closest 

military legal office at: legalassistance.law.af.mil. 

If you have financial challenges or questions before, 

during and after military or uniformed service, 

please visit our web site at: consumerfinance.gov/

military-financial-lifecycle.

About the CFPB

The Consumer Financial Protection Bureau 

is an independent federal agency built to 

protect consumers. We write and enforce 

rules that keep banks and other financial 

companies operating fairly. We also educate 

and empower consumers, helping them 

make more informed choices to achieve 

their financial goals. 

Learn more at consumerfinance.gov

Submit a complaint

Have an issue with a financial product or 

service? We’ll forward your complaint to the 

company and work to get you a response – 

generally within 15 days.

 Online

 consumerfinance.gov/complaint

 By phone (180+ languages)

 M-F, 8 a.m. - 8 p.m. ET

 (855) 411-CFPB (2372)

 (855) 729-CFPB (2372) TTY/TDD

 By mail

 Consumer Financial Protection Bureau

 P.O. Box 2900

 Clinton, IA 52733-2900

 By fax

 (855) 237-2392

3/2018